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Tax deduction on employment income in Nepal

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What is the obligation of employer with respect to employment tax payments?

A resident employer has the obligation of calculating employment tax of employees and deducting WHT on employment (on PAYE basis). As such the employer’s role is of a withholding agent. If you work for a resident employer, it is the responsibility of your employer to determine if your employment income is subject to income tax in Nepal.

Taxes should be withheld at the time of payment of salary to employee. But in case the taxpayer recognizes expenses under accrual basis of accounting before the actual payment is made, the withholding tax should be deducted at the time of making accounting entry in the books.

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