A single Nepali payslip touches several distinct compliance obligations at once — here's how the pieces fit together.
The Building Blocks
- Basic salary and allowances: the gross figure before any deduction
- SSF/PF contribution: deducted from the employee, matched by employer contribution, deposited to the fund
- TDS on salary: calculated progressively per the applicable income tax slab, deducted and deposited monthly
- Net pay: what actually reaches the employee's bank account
Why the Order of Operations Matters
TDS is calculated on taxable income after allowable deductions (including SSF/PF contributions up to the permitted cap) — get the sequence wrong, and you either over- or under-deduct tax, both of which cause problems: over-deduction hurts employee take-home unnecessarily, under-deduction creates a liability that surfaces at year-end reconciliation.
Year-End Reconciliation
At fiscal year-end, cumulative TDS deducted should match the employee's actual annual tax liability once their final income (including any bonus) is known — payroll systems that don't reconcile this properly leave employees with unexpected tax bills or refunds.
Bonus & Festival Allowance Treatment
Bonuses are taxable income and need to be incorporated into the TDS calculation for the month paid, not treated as a separate, untaxed payment.
Payroll errors are expensive to unwind after the fact. Company Sathi runs compliant payroll so SSF, PF, and TDS are calculated correctly every cycle.
