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Nepal

Basic Economic Summary

Overview

Nepal’s agricultural sector remains the principal economic activity in the country and has employed about 65% of its working population. Despite the country’s challenges with poverty and reliance on remittances, Nepal has managed to strive towards economic growth since the 1950s through a series of five-year plans. 

Basic Information

  • Local Languages: Nepali, Maithili, Bhojpuri, Tharu
  • Capital: Kathmandu
  • Currency: Nepalese Rupee (NPR)
  • Population: 29.93 Million (2022)
  • Date Format: dd/mm/yyyy

Useful Information

  • GDP Per Capita (in USD): 1,226.01 (2022)
  • Exchange Rate (NPR/USD): 0.0083
  • PISA Ranking (2018): Information not available

Local Universities

Top Local Universities

Salary Data

Average Salary of Jobs (Per Month)

Job Title Average Salary (in NPR) Average Salary (in USD)
Financial Accountant 24,900 - 85,900 207.51 - 715.86
Software Engineer 40,200 - 115,000 335.01 - 958.37
Data Analyst 39,600 - 111,000 330.01 - 925.03
Sales Manager 87,900 - 259,000 732.52 - 2,158.40
Project Manager 43,900 - 136,000 365.85 - 1,133.37

More information about average salaries in Nepal can be found here.

Talent Sourcing Tips

Taxes

Employer Payroll Tax

Employers are taxed at a flat rate of 10% of the employees salaries to contribute towards the country’s provident fund.

Employee Payroll Tax

Employees are taxed 10% as a contribution towards the country’s provident fund.

Employee Income Tax

For Individuals For Couples Tax rate
For Individuals For Couples
0 - NPR 33,333 0 - NPR 37,500 1% 1%
Next NPR 8,333 Next NPR 8,333 10% 10%
Next NPR 16,667 Next NPR 16,667 20% 20%
Next NPR 108,333 Next NPR 104,167 30% 30%
Next NPR 166,667 Next NPR 166,667 36% 36%

Minimum Wage & Payroll

Minimum Wage

The minimum wage is approximately NPR 123 hourly which sums up to NPR 925 per day.

Payroll Cycle

The payroll cycle follows from contract to contract but customarily salaries are paid out monthly.

Bonus

13th month salary

There is no obligatory rule but it is customary to pay the 13th month salary as bonus.

Working Hours & Statutory Leave

Working hours

The general work hours are 8 hrs a day and 40 hrs a week which may stretch to 48 hrs as well. Overtime work hours are restricted at 4 hrs a day and 20 hrs a week

Overtime pay

In Nepal, overtime is usually paid at 1.5 times the normal wages.

Public Holidays

The list of public holidays in Nepal can be found here.

Leave

Annual Paid Leave

All employees are entitled to 1 day of paid annual leave for every 20 working days of employment.

Sick Leave

If the employment contract is for a period of 1 year, the employee is entitled to a maximum of 15 days of half paid sick leave. If the term of employment contract is less than a year, the no. of sick leaves are calculated on a pro-rata basis.

Parental Leave

  • Maternity Leave

For female employees, they are entitled to a continuous leave of 52 days with full pay which may start before or after the delivery of the child. Such a leave can only be obtained two times during the period of service in the same organisation if there are no mishappenings.

  • Paternity Leave 

Paternity leaves vary from employer to employer. The usual paternity leave period is 15 days with full pay.

Offboarding & Termination

Termination Process

An employment contract may be terminated on account of voluntary termination by either employer or employee, retirement, expiration of contract or termination by dismissal.

Notice Period

The employers should follow the following notice period in the event of a termination of contract for reason apart from termination by dismissal.

Contract Period Notice Period required before employment expires
0 - 4 weeks 1 day
4 weeks - 1 year 7 days
More than 1 year 30 days

Severance Pay

Employees are eligible to severance pay from the first day of employment at a fixed rate of 8.33% of the basic remuneration.

Probation period

The employee may be under probation for a maximum period of 6 months.

Employee Benefits

Insurance

Nepal established a labor code in 2017 to have a mandatory social insurance program for private-sector employees and daily workers. Insured employees are expected to contribute 11% of their monthly earnings while employers are to pay 20% of their payroll. The coverage for this scheme includes old-age benefits, disability and work injury benefits, survivor benefits, sickness and maternity benefits.

Employee Share Option Plan

ESOPs in Nepal may be offered to workers as a way to motivate them for  a long-term commitment to their company. However, this benefit has only been recently offered by an e-commerce company in 2019.

VAT

The Standard VAT rate in Nepal is 7.5%

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