TDS on Salary in Nepal: Deposit Deadline, e-TDS Filing and Penalties

When and how Nepali employers deposit salary TDS: the 25-day rule after each Nepali month, e-TDS on the IRD portal, revenue codes 11211 and 11111, and what happens if you're late.

This guide is for employers and accountants in Nepal withholding tax on salaries under the Income Tax Act 2058.

Every month you deduct tax from salaries, you become a "withholding agent". The tax isn't yours; it belongs to the government, and you have a fixed window to send it on.

The deadline: 25 days after the Nepali month ends

Salary TDS is deposited within 25 days after the end of the Nepali (BS) month in which it was deducted.

If you pay salaries by the English calendar, use the Nepali month in which the salary was paid to find the deadline. For example, salary paid on 31 August 2026 falls on Bhadra 15, 2083, so its TDS is due by Asoj 25, 2083.

Two revenue codes, not one

Salary TDS is split into two heads:

Employees enrolled in SSF don't pay the 1% band, so they usually have nothing under 11211.

Step by step each month

1. Run payroll and work out each employee's TDS for the month, based on expected income for the whole fiscal year.
2. Split each employee's TDS between 11211 and 11111.
3. Prepare the e-TDS entry on the IRD taxpayer portal. Each line has the employee's PAN, name, payment date, amount paid and TDS amount, under the right revenue code.
4. Deposit the tax through a bank or the online payment options the portal offers, and keep the voucher.
5. Keep a monthly file: the payroll sheet, e-TDS submission and payment voucher.

Tip: IRD's e-TDS Excel upload has a fixed column layout. Download the sample from inside the portal once, and make sure your payroll export matches it before the first upload.

Year end

• Give each employee a record of tax withheld for the year.
• Check that the year's TDS matches the employee's final liability. Raises, bonuses, Dashain allowance and mid-year joiners are where mismatches happen.
• Employees with income only from one employer and fully withheld tax generally don't need to file a separate return. Those with other income do.

What happens if you're late

Late deposit of withheld tax attracts interest (commonly cited as 15% a year on the unpaid amount) and may attract additional fees and penalties under the Income Tax Act. As withholding agent, the employer is responsible for the tax not deposited.

Late TDS also blocks other work: tax clearance, bank loans and government tenders often require a clean TDS history.

Common mistakes

• Using the English month to find the deadline. It's the Nepali month that counts.
• Depositing everything under one revenue code.
• Calculating TDS on one month's pay instead of the year's. It goes wrong as soon as a bonus is paid.
• Missing or wrong PANs. The e-TDS lines won't match the employee.
• Still using last year's slabs. FY 2083/84 changed the bands; see the slab guide.

How TeamKro helps

TeamKro calculates TDS for each employee against the whole fiscal year and splits it between 11211 and 11111. It exports an e-TDS-ready sheet from each pay run and puts every TDS, SSF and CIT deadline on a calendar in BS and AD, with reminders. See it in a demo.

FAQ

Is the deadline 25 days after salary is paid?
No. It's 25 days after the end of the Nepali month in which the tax was deducted.

Do we file TDS even if it's zero?
If no tax was withheld, there's normally nothing to deposit, but keep payroll records for every month. Confirm any filing obligations with IRD for your case.

Who is liable if TDS isn't deposited?
The employer, as withholding agent.

Last checked 31 October 2026. Based on the Income Tax Act 2058 and IRD practice as commonly described; deadlines, codes and penalties should be confirmed on ird.gov.np or with your accountant. General information, not tax advice.

Sources: Inland Revenue Department · Khatapana: Revenue codes for tax payment · GFCS: e-TDS filing in Nepal