Nepal Employer Payroll — Monthly TDS/eTDS & SSF Contributions

Confirm the employer holds a valid PAN with the Inland Revenue Department and is registered with the Social Security Fund (mandatory for all private-sector employers with one or more employees under the Social Security Act 2074). Establish whether the employer is on SSF or still on the legacy EPF/CIT/Provident Fund route, as this drives the 1% first-band Social Security Tax treatment for every employee.

For each employee, collect the inputs required to determine the correct TDS slab table and SSF/PF deduction. Key determinations are: residency status (183-day or normal-abode test under Income Tax Act 2058), single vs married-couple election, SSF enrolment, basic salary (+ dearness allowance) for SSF base, and any eligible deductions. Flag female employees with remuneration-only income for the 10% female tax credit.

Annualise each employee's taxable salary, apply the correct progressive slab table (single or married-couple, FY 2082/83), factor in eligible deductions (retirement fund up to NPR 500,000, life insurance NPR 40,000, health insurance NPR 20,000, building insurance NPR 5,000, remote-area up to NPR 50,000), apply the female tax credit (10%) where applicable, then divide by 12 to get monthly TDS. For non-resident employees apply the flat 25% rate.

For SSF-registered employers, compute the monthly SSF contribution on each employee's basic remuneration (basic salary + dearness allowance): employee 11% deducted from pay, employer 20% as an additional cost. For non-SSF employers on the legacy Labour Act 2074 route, compute Provident Fund (10% each) and gratuity (8.33% employer). Verify no employee's basic remuneration exceeds the SSF monthly ceiling (reported NPR 350,000 for FY 2082/83 — flag as a research gap requiring confirmation).

Deposit the month's withheld TDS with the IRD and file the eTDS return via the IRD eTDS system — both must be completed within 25 days of the Nepali month-end (e.g. Shrawan TDS and eTDS return due by Bhadra 25). Separately, remit the SSF contributions (employer 20% + employee 11%) to the SSF online portal within 25 days of month-end. Late eTDS filing attracts NPR 100/day capped at NPR 5,000 plus 2.5% p.a.; late TDS deposit attracts 15% p.a. interest plus 1.5%/month; late SSF remittance attracts a fine equal to double the unpaid contribution plus 10% p.a. interest.

At fiscal year-end (Ashad end, mid-July), reconcile total TDS withheld and deposited across all 12 months against each employee's annual tax liability. Employees whose only income is remuneration fully withheld at source are not required to file — except any natural person with taxable income over NPR 4,000,000 must file an individual return under Section 96 of the Income Tax Act 2058. The employer's annual filing (D-01, D-02, or D-03 depending on turnover) is due within 3 months of year-end (Ashoj end, mid-October), with a possible 3-month extension to Poush end on application.