Minimum Wage in Nepal: NPR 19,550 Monthly, Daily & Hourly Rates Under the Labour Act 2074

The minimum wage in Nepal is NPR 19,550 per month — a statutory floor made up of a basic wage of NPR 12,170 and a dearness allowance (DA) of NPR 7,380. It came into force on 1 Shrawan 2082 BS (17 July 2025) and was fixed by the Minimum Wage Fixation Committee under Section 106 of the Labour Act, 2074 (2017), after tripartite negotiations between the Ministry of Labour, Employment and Social Security (MoLESS), the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), and the Joint Trade Union Coordination Centre (JTUCC). The rate applies to every worker in the formal economy except those in tea estates and gardens, which have a separate wage schedule. This guide explains the full wage structure, the legal basis, sector coverage, overtime and payment rules, penalties for underpayment, and the complaint mechanism workers can use when they are paid less than the floor.

What Is the Minimum Wage in Nepal Right Now?

In Nepal, the minimum wage is a statutory wage floor — the legally lowest amount an employer may pay a worker for a full month, a full day, or an hour of work. No contract, appointment letter, apprenticeship agreement, or probation arrangement may pay below this floor. The wage covers a worker working an 8-hour day, 48-hour week under Section 28 of the Labour Act, 2074. Anything worked beyond that is overtime and must be paid at 1.5 times the normal rate.

The current floor is split into two components as required by Section 106 of the Labour Act: a basic wage (used for calculating gratuity, provident fund, social security fund contribution, and compensation) and a dearness allowance (used to offset inflation). Both components together are what reaches the worker's hand; the split matters only for downstream benefit calculations.

Full Minimum Wage Breakdown — Monthly, Daily, Hourly

The part-time hourly rate is slightly higher than the full-time hourly rate because part-time workers do not receive paid leave, festival allowance, or gratuity — the gap compensates for those missing entitlements. The daily rate is computed on a 26-working-day month (Saturday is the weekly rest day under Section 31).

Legal Basis — Labour Act 2074 and Minimum Wage Fixation Committee

Nepal's minimum wage rests on three legal pillars, all published by the Nepal Law Commission at lawcommission.gov.np:

• Constitution of Nepal 2072 (2015), Article 34 — Right Relating to Labour: every worker has the right to appropriate remuneration, facilities and contribution-based social security. This makes the minimum wage a constitutional floor, not merely a statutory one.

• Labour Act, 2074 (2017), Section 106 — Minimum Remuneration: the Government of Nepal shall, on the recommendation of the Minimum Wage Fixation Committee, fix the minimum remuneration of workers. The minimum wage must be reviewed at least once every two years. Once fixed, it applies to every employer irrespective of the number of workers.

• Labour Rules, 2075 (2018), Rules 19–21: prescribe the composition and working procedure of the Minimum Wage Fixation Committee, the method of consultation with tripartite partners, and the manner of publishing the wage in the Nepal Gazette.

Composition of the Minimum Wage Fixation Committee (Section 107)

• Joint Secretary, Ministry of Labour, Employment and Social Security — Chairperson

• Three representatives of recognised employers' organisations (typically FNCCI, CNI, FNCSI)

• Three representatives of recognised trade unions (typically GEFONT, NTUC, ANTUF under JTUCC)

• One labour expert nominated by the Government of Nepal

• Director of the Department of Labour & Occupational Safety — Member Secretary

The committee's recommendation is approved by the Cabinet and then published in the Nepal Gazette. It takes effect from the date stated in the gazette notice — usually 1 Shrawan (the first day of the Nepali fiscal year).

Historical Growth of Nepal's Minimum Wage

Each hike corresponds to a meeting of the Minimum Wage Fixation Committee and a fresh Nepal Gazette notification. The next scheduled review falls due in Shrawan 2084 BS (July 2027).

Who Is Covered — and Who Is Not

Covered Workers

The Labour Act 2074 covers any employment relationship (Section 2(t)) irrespective of sector, and the minimum wage binds:

• Industrial and manufacturing workers (garment, cement, steel, noodles, beverages)

• Hospitality staff (hotels, restaurants, bars, lodges)

• Construction and infrastructure workers (including contract labour under Section 15)

• Retail, wholesale, trading establishment staff

• Transport operators (drivers, conductors, loaders under the Labour Act, not under the Motor Vehicles Act)

• Service-sector employees (hospitals, schools, colleges, banks, NGOs)

• Apprentices after probation completion (Section 12 — probationary apprentices receive at least the minimum wage for their category)

• Part-time workers (prorated at NPR 107/hour)

Sectors With Separate Wage Mechanisms

• Tea estates and gardens: governed by the separate Tea Estate Labour Regulations, with its own tripartite negotiation. As of the most recent notification, pluckers and permanent field workers in the tea sector are paid NPR ~450/day plus rations, housing and medical — materially below the general floor, reflecting the industry's historical practice of in-kind benefits.

• Agricultural labour (informal): the Labour Act 2074 excludes the casual informal agricultural workforce from its scope; wages there are governed by local practice, not statute.

• Domestic workers (in private households): currently not covered by the statutory floor; a dedicated Domestic Workers Bill has been under discussion since 2022.

• Foreign missions, diplomatic households: exempt from the Labour Act; wages governed by the sending state's law or bilateral practice.

Overtime, Payment Timing and Deductions

• Overtime (Section 29): any hour worked beyond 8 per day or 48 per week must be paid at 1.5 times the ordinary rate. Overtime is capped at 24 hours per week. On the current floor, one hour of overtime = NPR 151.50.

• Payment interval (Section 34): wages for a monthly-paid worker must be paid on or before the 7th day of the following month. Daily-paid workers must be paid at the end of each working day unless a written agreement prescribes weekly payment. Delay attracts a fine under Section 163.

• Mode of payment (Section 33): payments of NPR 25,000 and above must be made through electronic transfer to a bank account in the worker's name — cash payment above that threshold is non-compliant.

• Permissible deductions (Section 35): limited to (a) income tax withholding under the Income Tax Act 2058, (b) the worker's share of Social Security Fund contribution (11% of basic), (c) Provident Fund / CIT contributions, (d) cooperative or loan repayments authorised in writing, and (e) court-ordered deductions. Fines, damages, shortages, cash-till losses may not be deducted without written acknowledgement and Labour Office approval.

• Festival allowance (Section 34): additional one-month basic wage each year around Dashain — on top of the minimum wage.

• Gratuity (Section 53): 8.33% of basic salary contributed to SSF from day one of employment.

Penalties for Paying Below the Minimum Wage

Under Section 163 of the Labour Act 2074, an employer who pays a worker below the statutory floor, delays wages, or makes unlawful deductions is liable to:

• A fine of up to NPR 50,000 per worker per offence imposed by the Labour Office, plus

• Full recovery of the unpaid wage difference together with interest from the date it was due, plus

• Liability under Section 167 for repeat offenders — further fine up to NPR 100,000 and an order to cease operations until compliance.

The Department of Labour & Occupational Safety (DoLOS) also lists repeat offenders on its public non-compliance register, which in turn affects FDI approvals, government tender eligibility and foreign-employment licence renewals.

Minimum Wage vs "Basic Salary" — Clearing the Confusion

The phrase "basic salary in Nepal" can mean two different things:

• In the statutory sense, "basic" is the NPR 12,170 component of the minimum wage. This is the number used to compute provident fund (10% + 10%), SSF contribution (11% + 20% = 31% of basic), gratuity (8.33% of basic), and leave encashment.

• In private-sector HR practice, "basic salary" is often a larger notional figure (50–60% of gross CTC) that an employer assigns for payroll structuring. That internal figure cannot go below the statutory basic of NPR 12,170, but it can be higher.

Employees reviewing a job offer should check both the gross salary and the declared basic — because gratuity, provident fund and SSF entitlements are calculated on the declared basic, not on gross.

Minimum Wage and the Social Security Fund (SSF)

Under the Contribution Based Social Security Act 2074, every employer in the formal sector must enrol workers in the Social Security Fund (SSF). The contribution is calculated on basic salary:

• Employee share: 11% of basic (NPR 12,170 × 11% = NPR 1,338.70/month at the floor).

• Employer share: 20% of basic (NPR 12,170 × 20% = NPR 2,434/month at the floor) — this is in addition to the wage, not deducted from it.

• Total to SSF: NPR 3,772.70 per worker per month at the minimum wage.

This is why the "true cost to the employer" of a minimum-wage worker is roughly NPR 19,550 + NPR 2,434 = NPR 21,984 per month, before festival allowance and gratuity. The SSF number and registration status can be verified at ssf.gov.np.

How Does Nepal's Minimum Wage Compare Internationally?

On a USD-equivalent basis, Nepal's floor is the highest in South Asia after Indian urban-state floors (Delhi, Kerala, Maharashtra), and it is the only regional floor that is statutorily reviewed every two years.

Filing a Complaint for Underpayment

If you are paid below the minimum wage, pursue the complaint in this order:

• Step 1 — Internal grievance: raise it in writing with the employer (HR or management). Keep a dated copy.

• Step 2 — Labour Office: file a written complaint at the nearest Labour and Employment Office (there are 11 regional offices — Kathmandu, Lalitpur, Bhaktapur, Biratnagar, Janakpur, Hetauda, Birgunj, Pokhara, Butwal, Bhairahawa, Nepalgunj, Dhangadhi). The Labour Officer can order immediate wage recovery, interest, and a Section 163 fine.

• Step 3 — Department of Labour & Occupational Safety (DoLOS): appeal to the Director General at the DoLOS head office, Minbhawan, Kathmandu (dol.gov.np) if the Labour Office decision is unsatisfactory.

• Step 4 — Labour Court: appeal within 35 days of the DoLOS decision to the Labour Court under Section 152. The Labour Court is a specialised first-instance tribunal.

• Step 5 — Supreme Court (writ): in cases raising constitutional labour-rights questions, a writ petition under Article 46/133 of the Constitution may be filed.

Statute of limitation under Section 161: wage claims must be filed within two years of the cause of action (the date the underpayment occurred).

Real-World Wage Scenarios at the NPR 19,550 Floor

Common Employer Compliance Mistakes

• Including festival allowance inside the monthly wage — festival allowance is a separate statutory entitlement and cannot be absorbed into the NPR 19,550 figure.

• Paying overtime at 1.0× instead of 1.5× — a frequent finding during DoLOS inspections of hotels and restaurants.

• Deducting uniform costs, training fees or cash-shortage from wages — impermissible under Section 35.

• Using probation to pay below the floor beyond 6 months — Section 12 caps probation at 6 months, and probationers earn no less than the minimum wage for their job category.

• Treating contract / outsourced labour as "not our workers" — Section 15 makes the principal employer jointly liable for any wage shortfall by the contractor.

• Misclassifying workers as "interns" to dodge the wage — the Labour Act applies to the substance of the relationship, not its label.

Where to Read the Official Wage Notification

• Nepal Gazette (Nepal Rajpatra) — search "न्यूनतम पारिश्रमिक" / "Minimum Remuneration" issue of Shrawan 2082: rajpatra.dop.gov.np

• Ministry of Labour, Employment and Social Security (MoLESS): moless.gov.np — policy decisions, press statements, tripartite agreement text.

• Department of Labour and Occupational Safety (DoLOS): dol.gov.np — inspection notices, compliance circulars, complaint portal.

• Labour Act 2074 (2017) full English text: lawcommission.gov.np (search "Labour Act, 2074").

• Social Security Fund (SSF): ssf.gov.np — contribution schedules and employer registration.

Conclusion

Nepal's current statutory minimum wage of NPR 19,550 per month — a basic of 12,170 plus a dearness allowance of 7,380 — is a floor, not a target. It applies to virtually every formal-sector worker, it is reviewed every two years, and it is enforceable through the Labour Office, the Department of Labour & Occupational Safety, and ultimately the Labour Court. Employers should budget in overtime, SSF, festival allowance and gratuity on top of this figure when modelling true labour cost. Workers who are paid below the floor have a clear, codified statutory remedy — with a two-year limitation period — and should document underpayment from the first pay cycle it occurs.