Nepal income tax brackets 2082/83: a salaried person's cheat sheet

If you take home a salary in Nepal and have ever stared at the Tax Deducted at Source line on your payslip wondering how the number was actually computed, this is the cheat sheet.

The slabs for FY 2082/83 (2025/26) are unchanged from FY 2081/82 — the Finance Act 2082 kept the same brackets, the same SSF waiver, the same 10% female rebate, and the same deductions. So the worked examples below will hold for the entire year.

I've cross-checked the slabs against the Inland Revenue Department, the PKF Trunco tax rate booklet for 2082/83, and Common Law Associates. All three agree — including the 39% top bracket above Rs 50 lakh, which several less-careful blog posts still omit.

The slab tables, exactly

Single filer (sole)

Income range	Rate	What it costs at the top of the slab
Up to Rs 5,00,000	1% (SST)¹	Rs 5,000
Rs 5,00,001 – Rs 7,00,000	10%	Rs 25,000 (5,000 + 20,000)
Rs 7,00,001 – Rs 10,00,000	20%	Rs 85,000 (25,000 + 60,000)
Rs 10,00,001 – Rs 20,00,000	30%	Rs 3,85,000 (85,000 + 3,00,000)
Rs 20,00,001 – Rs 50,00,000	36%²	Rs 14,65,000 (3,85,000 + 10,80,000)
Above Rs 50,00,000	39%³	Add 39% on every rupee above 50L

¹ Social Security Tax. Waived for SSF contributors. ² 30% base rate + 20% surcharge on income above Rs 20,00,000. ³ 30% base rate + 30% surcharge on income above Rs 50,00,000.

Couple filer (joint)

Income range	Rate
Up to Rs 6,00,000	1% (SST)¹
Rs 6,00,001 – Rs 8,00,000	10%
Rs 8,00,001 – Rs 11,00,000	20%
Rs 11,00,001 – Rs 20,00,000	30%
Rs 20,00,001 – Rs 50,00,000	36%
Above Rs 50,00,000	39%

The couple structure gives you Rs 1 lakh of headroom at each of the first three slabs (entry threshold +Rs 1 lakh, second slab +Rs 1 lakh, third slab +Rs 1 lakh). Above Rs 11 lakh the slabs collapse to identical thresholds. The maximum tax saving from electing couple status, ignoring deductions, is about Rs 18,000 per year for a high earner — modest, but free if you qualify.

What is "assessable income," anyway

The slabs apply to taxable income, not to gross salary. The chain:

1. Gross salary — your CTC including allowances, festival bonus, dashain bonus.

2. Subtract employer's contribution to PF/SSF/CIT (these are not your income).

3. Subtract approved retirement contributions (your own + employer's, capped — see below).

4. Subtract life insurance premium up to Rs 40,000.

5. Subtract health insurance premium up to Rs 20,000.

6. Subtract approved donations (capped — see below).

7. = Taxable income, which is what the slab table operates on.

8. Apply the slabs → calculated tax.

9. Subtract the 10% female rebate (if applicable) → Tax payable.

The deductions above are what most salaried people miss, especially health insurance and approved donations.

The four deductions you should actually use

1. Retirement contributions (the big one)

Combined cap on EPF + SSF + CIT: lower of Rs 5,00,000 or one-third of assessable income from employment (Income Tax Act 2058 §63, as amended by Finance Act 2078).

For a Rs 12 lakh annual earner, one-third = Rs 4 lakh — that becomes your effective cap, not the Rs 5 lakh nominal limit. For a Rs 18 lakh earner, one-third = Rs 6 lakh, so the Rs 5 lakh cap binds. CIT contributions are voluntary; this is the lever you control.

The mechanics of which retirement bucket to use are covered in the dedicated CIT vs PF vs SSF post.

2. Life insurance premium — Rs 40,000

Pure-term life insurance premium counts. Endowment and ROP premium also count, but you should not buy ROP just to use this deduction. At the 30% marginal slab, this saves you Rs 12,000/year.

3. Health insurance premium — Rs 20,000

Most salaried people miss this entirely. If you have a private health policy or cover for parents, the premium is deductible up to Rs 20,000. At 30%, that's Rs 6,000 saved.

4. Approved donations — Rs 1,00,000 / 5% of assessable income

Donations to organisations approved under Section 12 of the Income Tax Act are deductible up to the lower of Rs 1,00,000 or 5% of assessable income. Random Facebook fundraisers and personal guthi contributions don't qualify; specific PAN-issuing charities do. Ask the charity for their tax-exemption certificate before giving.

Stacking them — what it actually saves

A Kathmandu-based 30-year-old earning Rs 1,00,000/month (Rs 12 lakh/year), at the 30% marginal slab, using all four:

Deduction	Amount	Tax saved at 30%
Retirement (1/3 of Rs 12L)	Rs 4,00,000	Rs 1,20,000
Life insurance	Rs 40,000	Rs 12,000
Health insurance	Rs 20,000	Rs 6,000
Donations	Rs 60,000 (5% of Rs 12L)	Rs 18,000
Total saved		Rs 1,56,000

That's 13% of gross salary — a meaningful number that most salaried people leave entirely or partially on the table.

Worked take-home: four real-world salaries

Assumptions for all four examples below: SSF contributor (so 1% SST is waived), single filer, no insurance or donation deductions used, only retirement contribution deduction at the maximum permitted (one-third of assessable income, up to Rs 5L cap).

Rs 30,000/month — Rs 3,60,000/year

• Gross: Rs 3,60,000
• Less retirement (one-third = Rs 1,20,000)
• Taxable: Rs 2,40,000 — entirely within the first slab
• Tax: 1% on Rs 2,40,000 = Rs 2,400 — but SSF waiver applies, so tax = Rs 0
• Annual take-home from tax perspective: Rs 3,60,000 (before SSF deduction).

The SSF entry-slab waiver is the only reason a Rs 30k earner pays zero income tax in Nepal.

Rs 50,000/month — Rs 6,00,000/year

• Gross: Rs 6,00,000
• Less retirement (one-third = Rs 2,00,000)
• Taxable: Rs 4,00,000 — within the first slab
• Tax: SSF waiver → Rs 0

A Rs 50k SSF-enrolled salaried earner also pays zero income tax. This surprises most people the first time they see it.

Rs 1,00,000/month — Rs 12,00,000/year

• Gross: Rs 12,00,000
• Less retirement (one-third = Rs 4,00,000)
• Taxable: Rs 8,00,000

Slab math:

• First Rs 5,00,000 @ 1% (SSF waived) = Rs 0
• Next Rs 2,00,000 @ 10% = Rs 20,000
• Next Rs 1,00,000 @ 20% = Rs 20,000
• Total tax: Rs 40,000/year ≈ Rs 3,333/month

Annual take-home (gross less own SSF contribution and tax): about Rs 10,28,000 net, or Rs 85,667/month. The effective tax rate on gross is 3.3%.

Rs 2,00,000/month — Rs 24,00,000/year

• Gross: Rs 24,00,000
• Less retirement (Rs 5,00,000 cap binds, one-third would be Rs 8 lakh)
• Taxable: Rs 19,00,000

Slab math:

• First Rs 5,00,000 @ 1% (SSF waived) = Rs 0
• Next Rs 2,00,000 @ 10% = Rs 20,000
• Next Rs 3,00,000 @ 20% = Rs 60,000
• Next Rs 9,00,000 @ 30% = Rs 2,70,000
• Total tax: Rs 3,50,000/year ≈ Rs 29,167/month

Effective rate on gross: 14.6%. Effective rate on taxable: 18.4%. Marginal rate: 30%.

A useful intuition: the 30% marginal slab covers the Rs 10–20 lakh range of taxable income. For a salaried worker maxing the retirement deduction, that corresponds roughly to gross salary of Rs 15–30 lakh per year (Rs 1.25–2.5 lakh per month). Most senior individual contributors and middle managers in Kathmandu sit in this band.

When the 36% and 39% surcharges actually kick in

The 36% bracket (30% + 20% surcharge) starts at taxable income of Rs 20 lakh — that's gross salary of roughly Rs 30 lakh per year (Rs 2.5 lakh/month) for a SSF-enrolled earner using the full Rs 5 lakh retirement deduction.

The 39% bracket (30% + 30% surcharge) starts at taxable income of Rs 50 lakh — gross salary of roughly Rs 55–60 lakh per year (Rs 4.5–5 lakh/month).

These are relatively rare for individual salaried workers in Nepal but increasingly common for tech employees on USD payroll converted to NPR, for senior bank executives, and for medical specialists. The marginal rate matters: at 39%, every Rs 100 of additional gross compensation produces Rs 61 of take-home. Bonus structure, equity compensation, and timing of one-off payouts genuinely matter at this income.

The female 10% rebate — applied where, exactly

Misunderstood often. The rebate is on the calculated tax, not on the slabs.

Worked example for the same Rs 1,00,000/month (Rs 12 lakh) earner above, but as a female sole filer:

• Calculated tax (from above): Rs 40,000
• Less 10% rebate: Rs 4,000
• Final tax payable: Rs 36,000

Conditions:

• Sole filer only — does not apply if filing as a couple.
• Employment income only — does not apply if income includes business profits or capital gains.
• Resident natural person — does not apply to non-residents.

If you check both boxes (female sole filer, employment-only), the rebate is automatic in your TDS calculation. If your employer's payroll system isn't applying it, point them to Schedule 1, Section 1(2) of the Income Tax Act and ask them to fix it.

Couple status — when to elect it

Married couples can file jointly (couple) or each as individuals (sole). The choice is once per year and made on the return.

Couple wins when:

• Only one spouse has substantial income, and that income falls in the Rs 5–11 lakh range (the "Rs 1 lakh of headroom at each slab" shifts you into a lower bracket).
• The lower-earning spouse has very small or no income.

Sole wins when:

• Both spouses have meaningful incomes in the same bracket (typically Rs 7 lakh+ each). Two sole filers each get their own Rs 5 lakh first slab; one couple filer gets only Rs 6 lakh total.
• The wife wants the 10% female rebate (only available to sole filers).

Run both calculations once at year-end before you sign the return — this is genuinely a Rs 10–30k decision in either direction.

What the 1% SST means and where it goes

The "Social Security Tax" charged on the bottom slab is a government revenue line, not your SSF contribution. They are separate.

• SSF contribution — 11% of basic salary, deducted from your paycheck, deposited into your SSF account, returnable to you as pension or on resignation.
• 1% SST — a tax on the first slab of taxable income, deposited with IRD, not refundable.

The Finance Act waived the 1% SST for SSF-enrolled workers because they already contribute 11% to SSF — taxing them another 1% on the same first Rs 5 lakh would be a double hit on the lowest earners. Workers who contribute to EPF only (or to neither) still pay the 1%.

For most private sector employees in Nepal as of 2026, SSF enrollment is now mandatory under the Contribution-Based Social Security Act 2074, so the practical default is no 1% SST. Verify with your payroll team if your slip still shows it.

How to actually file

For most salaried workers, filing is automatic. Your employer deducts TDS monthly using the slab table, deposits it with IRD, and issues a Form D-3 (annual TDS certificate) within 25 days of Shrawan end. If your only income is salary and the TDS matches your final tax liability, you don't need to file anything separately.

You do need to file:

• If you have side income (freelance, rental, capital gains beyond what brokers withhold). See the freelance side income tax post.
• If you want to claim deductions your employer didn't apply (commonly: health insurance, donations, life insurance bought outside employer payroll).
• If you are switching employers and need to consolidate two TDS certificates.
• If you are filing as a couple and one spouse's income wasn't on a single payroll.

Filing happens on the IRD Taxpayer Portal using your PAN. Deadline: end of Poush (mid-January) for individual returns, with an Asar (mid-July) extension available on request. Late-filing fees are modest but the interest on unpaid tax compounds.

Tracking tax in Kharchapatra

Two practical setup notes:

1. Income side: log your gross salary as one transaction; log the TDS deduction as a separate "Tax — Income Tax" expense. This way your monthly net cash flow matches your bank credit, and you can compare year-end TDS total against the slab math above.
2. Deductions side: tag insurance premiums (life and health), CIT contributions, and donations to specific tax-deductible categories. Year-end, sum these and check that you have used the full headroom — most salaried people leave the donation and health insurance deductions untouched.

If TDS on your slip looks higher than what the slab math here predicts, the most common reason is your employer not applying your retirement contribution deduction correctly. The fix is a one-line email to HR with your CIT and SSF receipts.

Two related reads

• How to read your Nepali salary slip — the line items that feed into the slab math above.
• CIT vs PF vs SSF — the retirement deduction is the largest single tax break a salaried person has.

This post lives in the tax section of the Nepal Money Basics guide.

If your slab math doesn't match your payslip, send the gross + TDS figures (no PII needed) to parjanya57@gmail.com and I'll find the missing line.