Quick Answer (TL;DR)

Gross = basic + allowances + bonus (before cuts). Net = Gross − 11% SSF (employee) − TDS − other deductions. Employer adds 20% SSF separately. Taxable = Gross − SSF (11%) − eligible CIT/insurance − allowances, then taxed via the FY 2083/84 unified slab (1% to Rs 10L — waived if SSF/pension contributor — then 10%/20%/27%/29%) and withheld as TDS.

Anatomy of a Nepali Salary Slip

Gross Salary

Basic salaryOften 50–60% of gross; base for SSF 11% calculation
AllowancesHouse rent, dearness, conveyance, medical, etc. — some partly exempt where the Act allows
Bonus / festivalDashain bonus (often one month’s basic) + performance bonus — added to gross in the month paid
OvertimeHours × rate (see our overtime calculator) — added to gross

Deductions

SSF — employee 11%11% of basic salary (deducted from you); exempts you from the 1% SST on the first Rs 10 lakh unified band (FY 2083/84)
SSF — employer 20%Not a deduction — employer’s contribution on top of your gross (total 31% to SSF)
TDS (income tax)Employer’s monthly withholding per slab on taxable income; reported via e-TDS
CIT / insuranceEmployee-paid Citizen Investment Trust (CIT) / life insurance where opted — partly deductible up to IRD limits
Advance / loanAny salary advance or staff loan installment

Net / Take-Home

Net = Gross − SSF (11% of basic) − TDS − CIT/Insurance − Advances

SSF — 11% + 20% = 31%

The Social Security Fund is the contribution-based insurance/retirement scheme (separate from Social Security Allowance, which is a tax-funded welfare benefit). For covered private-sector employees: employee pays 11% of basic, employer pays 20% of basic — total 31% of basic goes to SSF each month. Being an SSF contributor exempts you from the 1% SST on the first Rs 10 lakh unified band (FY 2083/84, as of October 2026 — pension contributors, pension income and sole-proprietorship income also reported excluded; confirm current IRD notice) — so an SSF-covered employee with annual taxable income under Rs 10 lakh generally has Rs 0 salary TDS.

Worked Slip Example (Rs 80,000 Gross)

Assumptions: basic Rs 48,000 (60% of gross), SSF-covered, no CIT for simplicity. Monthly view under FY 2083/84 unified slabs:

GrossRs 80,000 (basic 48,000 + allowances 32,000)
Less SSF 11% of basicRs 5,280
Taxable (annualised)(80,000 − 5,280) ×12 = Rs 8,96,640
TDS (monthly, unified slab)SSF-covered: Rs 0/month (Rs 8,96,640 is inside the Rs 10L band and the 1% is exempt). Non-SSF same pay: 8,96,640×1% = Rs 8,966/year ≈ Rs 747/month. (Old guides showing ~Rs 6,100–6,800/month used the pre-2083/84 5/6L-band slabs and no longer apply.)
Net (SSF-covered)Rs 80,000 − 5,280 − 0 ≈ Rs 74,720 + overtime/bonus month varies; non-SSF ≈ Rs 80,000 − 5,280 − 747 ≈ Rs 73,973
Use the calculator: Enter your gross, basic % and SSF toggle in SolutionsNepal's Salary Checker or Salary Tax Calculator for the exact TDS by FY 2083/84 unified slabs (no marital-status slab split).

Bonus, Overtime & Dashain

  • Dashain bonus: often 1 month’s basic, taxed as salary income in the month paid (TDS spikes that month)
  • Overtime: taxable as salary; rate often 1.5× basic-hourly — try our Overtime Calculator
  • Arrears/bonus bump: can push you into the next slab for that month only — normal, not an error

Common Mistakes to Avoid

  • Treating gross as take-home (forgot 11% SSF + TDS)
  • Thinking the employer's 20% SSF comes out of your salary (it is employer's extra)
  • Missing that SSF/pension contributors are exempt from the 1% SST on the first Rs 10 lakh — non-exempt staff pay ~1% on that band (e.g. ~Rs 8,966/year on Rs 8.97L taxable)
  • Comparing two offers by gross alone when basic % differs (SSF is only on basic)
  • Ignoring that a bonus month has higher TDS (slab applied to higher monthly taxable)

Checklist

  • Gross split into basic vs allowances confirmed (check offer letter)
  • SSF 11% (employee) + 20% (employer) on basic verified; 1% SST exemption applied where SSF/pension-covered (first Rs 10L band)
  • Taxable = gross − SSF(11%) − CIT/insurance (if any) − exempt allowance portion
  • TDS computed per FY 2083/84 unified slab (1/10/20/27/29%, no single/couple split) and reconciled to IRD e-TDS at year-end
  • Net = gross − SSF(11%) − TDS − other deductions; bonus/overtime months checked separately

Official Sources & Final Note

Sources: Inland Revenue Department slab notices (FY 2083/84), Income Tax Act 2058 (full text via lawcommission.gov.np), Social Security Fund (ssf.gov.np) contribution rules. Salary components and allowance exemptions follow the Act and Finance Act.

Last updated: September 27, 2026. Slabs rechecked as of October 2026 (unified 1/10/20/27/29%). Slabs and SSF rules change by Finance Act / SSF notice. Verify your employer's payroll sheet and IRD circular for your FY. SolutionsNepal is an educational guide, not a payroll advisor.

Frequently asked questions

What is gross vs net salary?

Gross = basic + allowances + bonuses before deductions. Net (take-home) = gross − SSF employee 11% − TDS (income tax) − other deductions like CIT, loan or advance. Employer's SSF 20% is not deducted from your gross; it is an extra cost the employer pays.

What is SSF on my slip?

Social Security Fund contribution for formal private-sector employees. Total 31% of basic salary: 11% deducted from employee + 20% added by employer. It covers medical, accident, family and old-age benefits, and exempts you from the 1% SST on the first Rs 10 lakh unified band (FY 2083/84, as of October 2026).

Why does my slip show “taxable income” lower than gross?

Because SSF employee contribution, eligible CIT/insurance (up to limits), and remote-area allowances are removed before applying the FY 2083/84 unified slab (1% to Rs 10L, 10% to Rs 15L, 20% to Rs 25L, 27% to Rs 40L, 29% above — as of October 2026). See our salary-tax guide for the slab math.

What is TDS on salary?

Income tax your employer withholds monthly using the unified slab + SST rule, then deposits to IRD and reports in e-TDS. It is the advance of your annual tax — reconcile it at year-end via the TDS certificate.

Put this guide to work — every SolutionsNepal tool is free and needs no signup.

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Written by SolutionsNepal Team

Nepal payroll and tax researchers