Net Payखुद तलब
Net pay is the amount that actually reaches an employee's bank account: gross salary minus the retirement contribution, any voluntary CIT election, monthly TDS, and any other authorised deduction such as a salary advance.
Also called: take-home pay, net salary, in-hand salary, khud talab
The deduction order
Net pay is arrived at in a fixed sequence, and the order matters because retirement contributions reduce the income that tax is then calculated on.
- Start with gross: basic plus allowances plus overtime.
- Deduct the statutory retirement contribution (PF or SSF).
- Deduct any voluntary CIT election.
- Calculate taxable income after those deductions, within the retirement ceiling, and deduct TDS.
- Deduct anything else authorised: an advance, a loan instalment, a recovery.
Why two employees on the same gross take home different amounts
Different basic-to-allowance splits change the contribution base. A CIT election changes taxable income. Insurance premium deductions change it again. None of that is visible from the gross figure, which is why comparing offers on gross alone tells an employee very little.
Net pay on a NPR 50,000 gross salary
Basic set at NPR 30,000, SSF enrolled, no CIT election.
- Gross salary
- NPR 50,000
- SSF employee share (11% of basic)
- NPR 3,300
- Monthly TDS
- Per the slab table, on income after the deduction
- Net pay
- Gross less the deductions above
Run the exact figure through the salary tax calculator: the TDS depends on annual income, not on the month in isolation.
Net Pay, answered
Take gross salary, deduct the PF or SSF contribution and any CIT election, calculate TDS on the income remaining after those deductions within the retirement ceiling, then deduct TDS and any authorised recoveries.
Offer letters usually quote gross. Net is gross less the retirement contribution, CIT if elected, and monthly TDS, so the difference is the sum of those three.
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
- Gross Salaryकुल तलबGross salary is an employee's total earnings for a period before any deduction: basic salary plus every allowance, overtime and taxable benefit. It is the figure most offer letters quote and the one employees compare against.
- 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.
- 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.
- Payslipतलब पर्चीA payslip is the statement an employer issues each pay period showing earnings, deductions and net pay. In Nepal it is the employee's proof of income and of the tax and contributions withheld on their behalf.
- Citizen Investment Trust (CIT)नागरिक लगानी कोषThe Citizen Investment Trust is a voluntary retirement savings scheme employees can join on top of PF or SSF. An employee elects to contribute up to 33% of basic salary, and the contribution reduces taxable income within the shared retirement ceiling.
- 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.
- Income Tax Slabsआयकर दरNepal's personal income tax is charged at marginal rates across annual income bands. For FY 2083/84 the first NPR 1,000,000 is taxed at 1%, rising through the bands to a top marginal rate of 29%.
- Salary Bank Transfer FileA salary bank transfer file is the formatted list of employee accounts and amounts a company uploads to its bank to pay everyone in one instruction, instead of entering transfers one by one.
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