Payroll
CTC vs gross vs net salary in Nepal: what each figure means
Four numbers describe one salary, and they are routinely confused in offer letters. Here is exactly what separates each from the next.
Updated August 2026
A Nepali salary is described by four figures, and an offer letter may quote any of them. Basic salary, gross salary, cost to company and net take-home are all different numbers, and the gap between the largest and smallest is substantial.
The relationships are fixed, so knowing any one figure plus the basic salary lets you derive the rest.
The four figures
Note that basic sits inside gross rather than beside it. Raising basic without raising gross does not increase the package — it moves money from allowances into basic, which increases both statutory contributions.
| Figure | Definition |
|---|---|
| Basic salary | The base component of the package, set by employer policy. Every statutory contribution is a percentage of this. |
| Gross salary | Basic plus all cash allowances. This is what an offer letter usually quotes. |
| Cost to company (CTC) | Gross plus the employer’s SSF or EPF contribution — the employer’s total outlay. |
| Net take-home | Gross minus the employee’s contribution and minus monthly TDS. What reaches the bank. |
How they connect
Because the employer contribution is a function of basic, and TDS is a function of gross, all four figures move together once basic is fixed.
- Gross = CTC − employer contribution (20% of basic under SSF)
- CTC = Gross + employer contribution
- Net = Gross − employee contribution (11% of basic under SSF) − monthly TDS
CTC, gross and take-home
- Employer SSF (20% of basic)
- 8,000.00
- Cost to company
- 1,08,000.00
- Employee SSF (11% of basic)
- 4,400.00
- Monthly TDS
- 1,726.67
- Net take-home
- 93,873.33
A worked example
The spread between what the employer pays and what the employee receives is NPR 14,126.67 a month — a little over 13% of cost to company. None of it is lost: the contributions accrue to the employee’s retirement account, and the TDS is credited against their annual tax liability.
| Line | Amount |
|---|---|
| Basic salary | NPR 40,000.00 |
| Employer SSF at 20% of basic | + NPR 8,000.00 |
| Gross salary | NPR 1,00,000.00 |
| Cost to company | NPR 1,08,000.00 |
| Employee SSF at 11% of basic | − NPR 4,400.00 |
| Monthly TDS | − NPR 1,726.67 |
| Net take-home | NPR 93,873.33 |
Reading an offer letter
When comparing two offers, establish which figure each is quoting before comparing anything. A CTC of NPR 1,08,000 and a gross of NPR 1,08,000 are not the same offer — the second is worth around NPR 8,000 a month more.
- 1Ask which figure is being quoted: CTC, gross or take-home.
- 2Ask what the basic salary is, since it drives both contributions.
- 3Ask whether the employer is enrolled in SSF or EPF, or neither.
- 4Ask what the festival bonus policy is, since it is annual income that affects your tax band.
Frequently asked questions
Is CTC the same as gross salary in Nepal?
No. CTC includes the employer’s SSF or EPF contribution, which sits on top of gross salary. For an SSF-enrolled employee, CTC exceeds gross by 20% of basic salary.
Why is my take-home so much lower than the salary I was offered?
Two deductions sit between gross and take-home: the employee retirement contribution — 11% of basic under SSF — and monthly TDS. If the offer quoted CTC rather than gross, there is a third gap, because the employer contribution was never yours to receive.