Festival Expenseचाडपर्व खर्च
Festival expense is a statutory payment of one month's basic remuneration, made once a year at the festival the employee celebrates. It is the Nepali equivalent of a thirteenth-month salary, and it is an entitlement under the Labour Act 2074 rather than a discretionary bonus.
Also called: Dashain bonus, festival allowance, chadparva kharcha, 13th month salary Nepal
Key facts
- Amount
- One month's basicBasic remuneration, not gross.
- Frequency
- Once a yearAt the festival the employee celebrates.
- Pro-rated
- YesFor employees with under a year of service.
- Status
- EntitlementNot a discretionary bonus.
Who it is paid to, and when
Every employee is entitled to festival expense once in a year, timed to the festival they celebrate. In practice most Nepali companies pay it before Dashain, which is why it is commonly called the Dashain bonus, but an employee who celebrates a different festival is entitled to have it timed to theirs.
An employee who has not completed a full year of service receives a proportionate amount rather than nothing. The pro-rating is by service in the year, so a joiner six months in receives roughly half.
Festival expense is not the annual bonus
These are two separate obligations and companies regularly conflate them. Festival expense is one month's basic, paid to everyone, regardless of whether the company made a profit. The annual bonus under the Bonus Act 2030 comes out of net profit, is capped as a multiple of monthly salary, and is nil in a loss-making year.
Paying one does not discharge the other.
How it is treated in payroll
- It is taxable income in the month it is paid, so it lifts that month's TDS.
- It is not part of basic salary, so it does not increase PF, SSF or gratuity contributions.
- Budget for it as a known annual cost of one month's basic per employee, not as a variable.
Festival Expense, answered
Festival expense is mandatory under the Labour Act 2074: one month's basic remuneration, once a year, timed to the festival the employee celebrates. It is commonly called the Dashain bonus because that is when most companies pay it.
One month's basic remuneration. It is calculated on basic, not on gross salary, and it is pro-rated for employees who have not completed a full year of service.
No. Festival expense is a fixed entitlement paid regardless of profit. The annual bonus under the Bonus Act 2030 is a share of net profit and is nil when there is no profit to distribute.
- Labour Act 2074, provisions on festival expense.
This page explains general practice in Nepal. It is not legal or tax advice, and statutory figures are revised from time to time. Check the current Act, rule or notice before acting on it.
Related terms
- Annual BonusबोनसThe annual bonus is a share of an enterprise's net profit distributed to its employees under the Bonus Act 2030. Ten percent of net profit is set aside for the purpose, and what remains after distribution goes to welfare funds.
- Basic Salaryआधारभूत तलबBasic salary is the fixed core of an employee's pay, before allowances, overtime and bonuses. In Nepal it is also the base every statutory contribution is assessed on, which makes it the most consequential number in a salary structure.
- Labour Act 2074श्रम ऐन २०७४The Labour Act 2074 is Nepal's principal employment statute, in force since 2074 BS (2017 AD) and applied together with the Labour Rules 2075. It sets employment types, working hours, overtime, leave entitlements, probation and notice, and the funded gratuity and social security model.
- TDS (Tax Deducted at Source)स्रोतमा कर कट्टीTDS is income tax withheld by the employer from an employee's salary each month and deposited with the Inland Revenue Department on the employee's behalf. It is calculated on annual projected income and spread across the year, not charged month by month in isolation.
- Cost to Company (CTC)Cost to company is the total annual cost of employing someone: gross salary plus the employer's own statutory contributions, festival expense, and any benefit the company funds. It is always higher than gross, and higher again than net pay.
Stop looking this up. Let the system apply it.
NepalHRM applies Nepal's payroll, leave and attendance rules per employee, every run, so the policy in your handbook and the numbers on the payslip stay the same document.
- No minimum commitment
- Nepal IRD compliant
- Free onboarding
- Cancel anytime