Job switch vs staying: how much of a raise justifies changing jobs in Nepal?

A friend messaged in Chaitra with an offer letter: same title, new company, Rs 40,000 more a month. He had already done the maths that everyone does — multiply by twelve, look pleased, hand in the resignation. What he had not done was open his salary slip from the last four months of the fiscal year, or ask what happens to his SSF, his gratuity, or his tax filing status the day he has two employers in one year instead of one.

Most of that math is small. One piece of it is not, and almost nobody checks it before signing.

The math everyone does, and what it skips

The naive version: new monthly pay minus old monthly pay, times twelve, done. On a jump from Rs 90,000 to Rs 1,30,000, that reads as Rs 4,80,000 a year better off.

That number is directionally right and worth taking seriously; a raise from switching is usually the single biggest lever available to a salaried professional (the negotiation post on this blog covers why an internal increment rarely closes the same gap, and what the market data on Nepal's inter-company pay bumps actually says, rather than repeating it here). But the twelve-times-monthly-delta figure assumes the transition is frictionless. It is not always. The frictions below are not reasons to stay in a job that has plateaued. They are the list to check before you decide the offer clears your bar, and to know about so nothing arrives as a surprise in Ashoj.

The tax return you didn't know you'd have to file

This is the one nobody mentions in the exit interview.

Under Section 4(3) of the Income Tax Act 2058, a resident salaried individual gets a simplified, final-withholding treatment, meaning your employer's TDS is your whole tax bill and you never file, provided (among other conditions) you have only one employer at a time in that income year. Section 97 ties the no-filing exemption directly to that same condition.

Switch jobs mid-fiscal-year and you fail it. You now have two employers in one income year, which means you must file your own return (via the IRD taxpayer portal), combining the salary and TDS certificates (Annexure 10) from both.

Here is why that is not just paperwork. Each employer's payroll calculates your TDS by projecting its own payment as if it ran the full year, then dividing by twelve. Neither one has any visibility into what the other employer paid you. Run a worked example on the FY 2083/84 slabs (1% floor waived by SSF membership up to Rs 10 lakh, then 10% to Rs 15 lakh, 20% to Rs 25 lakh, 27% to Rs 40 lakh, 29% above):

	Months worked	Monthly basic	Annual basic paid
Old employer	8 (Shrawan–Chaitra)	Rs 90,000	Rs 7,20,000
New employer	4 (Baishakh–Ashadh)	Rs 1,30,000	Rs 5,20,000
Combined actual	12	—	Rs 12,40,000

Combined taxable income after an 11% SSF deduction (Rs 1,36,400) is Rs 11,03,600. Applying the slabs: the first Rs 10 lakh is waived, and the remaining Rs 1,03,600 is taxed at 10%, for a true annual liability of Rs 10,360.

Now look at what each employer withheld on its own. The old employer, projecting Rs 90,000/month for a full year, lands on an annualised basic of Rs 10,80,000, which after the SSF deduction sits entirely inside the waived floor. It withholds zero TDS across those eight months. The new employer, projecting Rs 1,30,000/month for a full year, lands on an annualised taxable income of Rs 13,88,400 (using the same FY 2083/84 slab structure cross-checked against the 2083/84 salary-examples post), which computes to Rs 38,840 of tax for a full year, or about Rs 3,237/month, withheld across the four months actually worked: roughly Rs 12,947.

Add the two: Rs 12,947 withheld against a true liability of Rs 10,360. In this illustration, the switcher is over-withheld by about Rs 2,587, meaning a small refund is due once they file. That is not a universal result. It happens here because the higher-paying job was only worked for part of the year, while its payroll assumed that rate ran for all twelve months. A switch that goes the other way, a bigger raise, or a new employer that prorates differently for a mid-year joiner instead of annualising its full rate, can flip the sign, and a bigger jump than this one can flip it by a lot more than a couple thousand rupees. This is a calculation built from the sourced slab table and the sourced projection method, not a published Nepal case study; treat the direction as illustrative, and the obligation to check as the fact that is certain either way.

The practical upshot: budget for the filing itself as a cost (gathering two Annexure 10s, using the portal or a CA, before the Ashoj deadline covered in the late-filing-penalty post), and do not spend a refund you have not yet confirmed exists.

What actually happens to your gratuity and SSF cover

Two separate questions get conflated here, and the answers differ.

Gratuity is not at risk. A common, outdated worry is that leaving before a multi-year mark forfeits it. Since the Labour Act 2074, Section 53 requires 8.33% of basic salary deposited from day one, with no minimum tenure. The full mechanics, including the pre/post-2078 fund split, live in their own post; the point for a switcher is that eight months at a job still banks roughly 8.33% of basic pay times eight, and it travels with your SSF ID rather than resetting.

SSF medical cover is where a real gap can open. The SSF benefits post already covers the mechanism: the medical, sick-leave and maternity plan needs about three consecutive months of contributions before you can claim against it, and cover from a stopped job continues for roughly three months after contributions stop. Layer a job switch on top of that: your old employer's tail should overlap with your new employer's fresh three-month qualifying period, provided the new employer actually registers you and starts contributing promptly. SSF rules require that registration within three months of hire, which is itself a window, not an instant. If you take a month off between jobs, or the new employer is slow to register you, the gap between "old cover expired" and "new cover qualified" is where a health claim would fall through both nets. Ask HR on day one when SSF registration actually happens, not just what the offer letter promises.

The rest of what happens to your PF, CIT, and SSF balances on the switch itself, portability, withdrawal, the Pension Fund lock-in for anyone enrolled after mid-2021, is covered in full in the switching-jobs post.

The notice period has a price tag

If the new employer wants you sooner than your current notice period allows, Section 144(3) of the Labour Act 2074 lets your current employer deduct the equivalent pay from your final settlement instead of forcing you to serve it out. For anyone employed more than a year, that notice period is 30 days, so buying it out is roughly one month's basic pay, forfeited, in exchange for an earlier start date.

Weigh that against what you gain: leave encashment (mandatory, up to the accumulation caps, calculated on your last basic salary) partly offsets it, and the final-settlement post has the full worked cheque, including the profit bonus you have already earned for the period. None of this is a reason to delay a move; it is the number to net against the buyout cost before you tell the new employer you can start in two weeks.

The Dashain question nobody can answer cleanly

Section 37 of the Labour Act 2074 is clear about one direction: a new joiner who has not completed a year gets the festival allowance pro-rated to months served. It does not say, in as many words, what happens to a departing employee's stub-period entitlement if Dashain falls after they have already left, or while they are between jobs. The Dashain bonus post covers the allowance mechanics for someone who stays; for a switcher, the honest answer is that this is unresolved in the text of the Act itself. If your move happens anywhere near Kartik, get HR's answer in writing before you resign rather than assuming a payout either way.

Netting it out

Put a number on each side before comparing the raise to your current pay.

Item	Direction	Rough size
Raise (monthly delta × months remaining in FY)	+	Depends on timing
Notice-period buyout, if you don't serve it	−	~1 month's basic
Leave encashment payout on exit	+	Accrued days × (last basic ÷ 30)
Tax filing obligation (compliance cost, direction uncertain)	?	Requires filing to know
Gratuity accrued	Neutral	Travels with you regardless
SSF medical gap risk	Risk, not cost	Depends on registration speed

For the friend with the Rs 90,000-to-Rs-1,30,000 example above: a Rs 40,000/month raise held for four months of the fiscal year is Rs 1,60,000 gross before tax effects. Against that, a month's notice buyout (if he can't serve it) is roughly Rs 90,000 in forfeited old-job pay, though his leave encashment (say 40 accumulated days on his old Rs 90,000 basic, about Rs 1,20,000) more than covers it. In this illustration the tax question comes back as a small refund rather than a bill, though that direction is specific to this timing and jump size, not a rule. The net picture is still strongly positive, which is the point: these frictions are a checklist to run the numbers on, not a case against moving.

Four questions to have answered before you sign

Get these in writing, not as a verbal assurance, before you accept.

1. When does my SSF registration actually start at the new company? Not the date on the offer letter, the date HR will actually file it. If more than a couple of months will pass since your last SSF contribution, ask what covers you in between.
2. Will the new employer buy out my notice period, or am I serving it? If they want you sooner than your current notice allows, find out upfront whether that roughly one month of forfeited pay is something they top up, or a cost you absorb alone.
3. What exactly does my current employer owe me on the way out? Leave balance, gratuity accrued to date, any earned bonus. Get payroll to confirm the number before you resign, using the final-settlement post as the checklist, not after you've already handed in the letter.
4. Am I about to have two employers in this fiscal year? If the answer is yes, put an Ashoj reminder in your calendar the day you switch, while both Annexure 10s are easy to get, rather than chasing a former employer's payroll team eight months later.

What you actually need to know

Three things.

1. The raise is usually still worth it. Nothing here argues against a good offer; it argues for knowing the actual net instead of the gross monthly delta.
2. Two employers in one year means you file your own return. That is a certainty. Whether you owe more or get money back is not, and depends on the specific timing and size of the jump. Run the numbers instead of guessing.
3. Gratuity is safe from day one; SSF medical cover is the one to actively manage. Ask the new employer when registration actually happens, and don't let more than a couple of months pass between jobs if you can avoid it.

This post lives in the earn-more section of the Nepal Money Basics guide, next to the salary negotiation post and the switching-jobs PF/CIT/SSF walkthrough.

If you're mid-negotiation on an offer and want a second pair of eyes on the net number, send the two salary figures and rough timing (no PII) to parjanya57@gmail.com.