Salary of Secondary Level Government Teachers in Nepal: 2081 BS Update

Understanding Teacher Compensation in Nepal

Government teachers form the foundational pillar of Nepal’s public education system. Their dedicated service is instrumental in fostering national development and ensuring equitable access to education across the country’s diverse geographical and socio-economic landscapes. The compensation structure for these educators serves as a significant indicator of the government’s commitment to the education sector and the overall welfare of its civil servants.

This report specifically addresses the “2081 Update” as requested. It is imperative to clarify the temporal context for international readers. The Nepali calendar, Vikram Samvat (BS), is the official calendar of Nepal. The year 2081 BS primarily corresponds to the Gregorian calendar years 2024-2025 CE. More precisely, 2081 BS commenced in mid-April 2024 and extends until mid-April 2025. Consequently, the fiscal year 2081/82 in Nepal, which dictates the salary structure, began on Shrawan 1, 2081 BS (mid-July 2024) and is set to conclude on Ashad 31, 2082 BS (mid-July 2025). The information presented herein pertains to the compensation applicable during this specific fiscal period. Establishing this precise timeframe is critical, as any “update” in this context refers directly to budget announcements and their implications for the specified fiscal year.  

2. The 2081 BS Salary Landscape: No Base Salary Increment

A key finding for the fiscal year 2081/82 is the absence of a base salary increment for government employees, including secondary-level teachers. This decision marks a continuation of a trend observed over recent years. The budget speech for fiscal year 2081/82 (2024/2025 AD), delivered by Finance Minister Barsa Man Pun on Jestha 15, 2081 BS (May 28, 2024), explicitly stated that no salary raise would be implemented for teachers or other civil servants for this period.  

The current salary rates for government teachers in Nepal were last revised and made effective from Shrawan 2079 BS (July 2022 AD). This prior revision introduced a notable 15% raise across various categories of government officials, including teachers. As a result of the latest budget announcement, the salary scales established in 2079 BS remain unchanged for the fiscal year 2081/82.  

The government’s rationale for not increasing salaries stems from “pressure on resource management” and a “lack of financial resources”. This indicates a broader fiscal challenge confronting the Nepali government, which directly impacts its capacity to provide substantial pay raises, even while acknowledging the need for “time-appropriate” service facilities for its workforce. The stagnation of nominal base salaries for the fourth consecutive year, coupled with prevailing inflationary pressures, inevitably leads to a reduction in the real-terms purchasing power of teachers’ incomes. This erosion of real income can have significant implications for teacher morale, motivation, and the overall attractiveness of the teaching profession within the public sector.  

3. Detailed Salary Structure for Secondary Level Government Teachers (2081/82)

Given that the base salaries for government teachers were not revised for FY 2081/82, the figures remain consistent with those established in 2079 BS (2022 AD). Secondary-level teachers in Nepal’s government schools are categorized into three classes: First, Second, and Third. Their compensation is determined by a structured pay scale that encompasses a starting salary, a grade number, and a grade rate. The total monthly salary is computed by adding the starting salary to the increments accrued through grade progression. The grade rate represents a fixed amount added for each grade, reflecting increasing seniority and experience within a specific class.

The detailed salary structure for secondary-level government teachers for the fiscal year 2081/82 BS is presented in Table 1.

Table 1: Secondary Level Government Teacher Salary Structure (2081/82 BS)

Level	Position / Division	Starting Salary (NPR)	Grade Number	Grade Rate (NPR)	Total Salary (NPR)
SECONDARY LEVEL	First Class	56,787	6	1,893	68,145
SECONDARY LEVEL	Second Class	48,737	8	1,625	61,737
SECONDARY LEVEL	Third Class	43,689	8	1,456	55,337
Source:

The existence of such a clearly defined salary structure, complete with specified starting salaries and grade rates, underscores the high degree of transparency and standardization inherent in government sector compensation in Nepal. This contrasts notably with the often less transparent pay scales prevalent in the private sector. Furthermore, this standardization implies that a secondary teacher in a remote region of Nepal receives the same base salary as their counterpart in Kathmandu, a significant advantage that mitigates regional cost-of-living differences for teachers serving in less developed areas. This uniform pay scale is a deliberate policy choice that promotes equity across the public education system.  

4. Allowances and Benefits: Beyond the Base Salary

Beyond the foundational base salary, government teachers in Nepal receive several allowances and benefits that collectively enhance their overall compensation package and contribute significantly to their financial well-being and job security.

Dearness Allowance: While base salaries remained unchanged for 2081 BS, the government has announced a significant increase in the dearness allowance for the upcoming fiscal year 2082/83 (2025/26 AD). This allowance, which was previously NPR 2,000 per month, has been raised to NPR 5,000 per month, effective from July 17, 2025. This increase of NPR 3,000 is intended to offer some financial relief to civil servants, including teachers, in response to inflationary pressures. For the fiscal year 2081/82, the dearness allowance remained at its previous rate of NPR 2,000. The decision to increase the dearness allowance, rather than the base salary, indicates the government’s recognition of inflation’s impact on employee purchasing power. This represents a strategic fiscal maneuver to provide targeted financial relief without undertaking a full-scale revision of the salary structure, which would entail more substantial and long-term budgetary commitments.  

Festival Allowance (Dashain Bonus): This is a mandatory annual payment provided to all eligible employees, including government teachers. It is equivalent to one month’s basic salary for employees who have completed at least one year of service with their current employer. For those who have worked for less than a year, the payment is prorated based on the number of months worked. This allowance is designed to support employees in celebrating a major festival of their choice, most commonly Dashain, and is categorized as part of taxable income.  

Housing Allowance: Government employees, including teachers, are entitled to a housing allowance. This allowance typically ranges from 10% to 20% of their base salary, with the precise percentage contingent upon their grade and the geographical location of their posting.  

Medical Benefits: Civil servants and their immediate families are eligible for medical reimbursements or subsidized treatment at government-approved healthcare facilities. Furthermore, the Employees Provident Fund (EPF), a key social security organization, extends various benefits to its members, including reimbursements for medical treatment, claims for accident indemnity, and allowances for maternity and child care. The government’s education policy for FY 2081/82 also includes provisions for health insurance coverage for children under 10 years of age , which indirectly benefits teachers with young children.  

Pension and Gratuity: Government employment in Nepal offers the significant advantage of a lifetime pension upon retirement, the amount of which is calculated based on the final drawn salary and the total years of service. The Employees Provident Fund (EPF), a government-managed social security organization, plays a central role in administering retirement savings and implementing a Contributory Pension Scheme for federal government and public sector employees, in accordance with the Pension Fund Act, 2075. Under this scheme, 6% of the employee’s monthly salary is deducted, with the Government of Nepal contributing an equal proportion. The pension amount is designed to increase by 10% every three years, up to a maximum of five times. For employees who do not complete 20 years of service, the accumulated amount in their fund, including contributions, interest, and profit, is disbursed as a lump sum.  

Social Security Fund (SSF) Contributions: Employers in Nepal, including the government for its teachers, are mandated to contribute 20% of the employee’s basic salary towards the Social Security Fund (SSF). This 20% contribution is allocated as follows: 10% towards the provident fund, 8.33% towards gratuity, and the remaining portion towards health and accidental insurance schemes under the SSF. Employees also make contributions to their provident fund, and these contributions are eligible for annual income tax deductions.  

The robust package of non-salary benefits, encompassing pension, gratuity, comprehensive medical coverage, and social security contributions, renders government teaching positions highly attractive despite the stagnant base salaries. These benefits frequently surpass those offered by many private schools, providing a crucial foundation of long-term financial security and stability. The government’s continued investment in social security and pension schemes suggests a long-term strategy aimed at ensuring employee welfare and retaining talent, particularly when direct salary increments may not be fiscally feasible. This approach prioritizes stability and security over immediate, higher nominal pay.  

5. Taxation on Teacher Salaries in Nepal (FY 2081/82)

For the fiscal year 2081/82, the income tax rates in Nepal for individuals have remained unchanged from the preceding year. Nepal operates a progressive tax system, which means that higher income levels are subject to proportionately higher tax rates.  

The applicable tax slabs vary based on the individual’s marital status. These rates are crucial for understanding the net income of government teachers.

For Single Individuals (FY 2081/82):

• Up to NPR 500,000: 1%
• NPR 500,001 – 700,000: 10%
• NPR 700,001 – 1,000,000: 20%
• NPR 1,000,001 – 2,000,000: 30%
• NPR 2,000,001 – 5,000,000: 36%
• Above NPR 5,000,000: 39%  

For Married Couples (FY 2081/82): Couples have the option to elect for joint assessment to utilize these specific rates.

• Up to NPR 600,000: 1%
• NPR 600,001 – 800,000: 10%
• NPR 800,001 – 1,100,000: 20%
• NPR 1,100,001 – 2,000,000: 30%
• NPR 2,000,001 – 5,000,000: 36%
• Above NPR 5,000,000: 39%  

It is important to note that while the 1% tax on the first slab generally does not apply to employment income, the festival allowance is considered part of taxable income.  

Deductions and Rebates: Specific deductions are available that can reduce a teacher’s taxable income. These include contributions to the Social Security Fund (SSF) or other approved retirement funds, where a deduction of 1/3rd of assessable income, NPR 500,000, or the actual contribution (whichever is lower) can be claimed. Additionally, further deductions may apply for individuals working in remote areas or those with pension income.  

Table 2 provides a clear overview of Nepal’s income tax slabs for individuals for FY 2081/82.

Table 2: Nepal Income Tax Slabs for Individuals (FY 2081/82)

Taxable Income Range (NPR)	Single Individual Rate	Married Couple Rate
Up to 500,000	1%	–
Up to 600,000	–	1%
500,001 – 700,000	10%	–
600,001 – 800,000	–	10%
700,001 – 1,000,000	20%	–
800,001 – 1,100,000	–	20%
1,000,001 – 2,000,000	30%	30%
2,000,001 – 5,000,000	36%	36%
Above 5,000,000	39%	39%

The stability of tax rates for FY 2081/82 offers a degree of predictability for government teachers in their financial planning. This consistency, combined with the transparent salary structure, enables more accurate budgeting and a clearer understanding of net income. Furthermore, the specific exemptions and deductions, such as those for SSF contributions and remote area allowances, illustrate that Nepal’s tax policy incorporates targeted relief and incentives. This approach acknowledges the diverse circumstances of its workforce, including teachers serving in challenging or underserved locations, where these deductions can tangibly increase their take-home pay.  

6. Contextual Comparisons: Government vs. Other Teaching Sectors

While government teaching positions in Nepal offer unparalleled stability and a comprehensive benefits package, their base salaries, particularly at entry and mid-career levels, may not always be the highest when compared to certain private and international schools. A comparative analysis provides a broader understanding of the compensation landscape for educators in Nepal.

Government Schools (via Teacher Service Commission – TSC): Teachers recruited through the TSC generally enjoy the most stable income and benefits.

• Entry-Level (0–3 years): NPR 25,000–30,000
• Mid-Career (4–9 years): NPR 35,000–50,000
• Senior-Level (10+ years): NPR 50,000–70,000  

Private Schools: Salaries in private schools exhibit considerable variation, largely influenced by the school’s reputation, geographical location, and available resources.

• Entry-Level (0–3 years): NPR 15,000–25,000
• Mid-Career (4–9 years): NPR 25,000–40,000
• Senior-Level (10+ years): NPR 40,000–60,000  

International Schools: These educational institutions typically cater to affluent families and charge significantly higher tuition fees. They also tend to seek teachers with advanced qualifications, specialized teaching certifications, or international experience, which translates into substantially higher salaries.

• Entry-Level (0–3 years): NPR 40,000–50,000
• Mid-Career (4–9 years): NPR 50,000–70,000
• Senior-Level (10+ years): NPR 70,000–90,000  

Regional Salary Variations within Nepal: Teacher salaries in Nepal can also vary significantly by region. These differences are primarily driven by variations in the cost of living, the demand for qualified teachers, and the availability of educational resources.

• Kathmandu Valley: As the primary education hub of Nepal, Kathmandu generally offers the highest salaries, particularly within private and international schools (ranging from NPR 30,000–70,000 across school types).
• Pokhara: With its growing reputation as a business and tourism center, Pokhara has seen an increase in private schools, though salaries are typically lower than those in Kathmandu (ranging from NPR 20,000–50,000).
• Rural Areas: Teachers in rural areas, especially those in private schools, often face the lowest salaries (ranging from NPR 15,000–30,000) due to limited funding and fewer resources.  

Crucially, government teaching positions stand as an exception to this regional variation, as their pay scales are standardized across the entire country. This means that a government teacher serving in a rural area earns the same base salary as their counterpart in an urban center like Kathmandu, a distinction not typically found in private sector roles.  

This comparative analysis highlights the unique value proposition of government teaching jobs: unparalleled stability, comprehensive benefits (including pension, social security fund contributions, and medical coverage), and a standardized pay structure that applies uniformly across all regions. This inherent stability and long-term security can often outweigh the potentially higher nominal salaries offered by some private or international schools, particularly within a developing economy where job security is a significant concern. The standardization of government teacher salaries across all regions also serves a vital policy objective: promoting equity. By ensuring that teachers in remote or less developed areas receive the same base compensation as those in urban centers, this policy helps to attract and retain qualified talent in underserved regions, which is fundamental for achieving equitable national educational development.  

7. Conclusion: Outlook for Government Teacher Compensation

The 2081 BS update for secondary-level government teachers in Nepal is characterized by a continuation of the base salary scales that were established in 2079 BS (2022 AD). No new increments to basic pay were announced for the current fiscal year. However, the government has responded to prevailing inflationary pressures by announcing a significant increase in the dearness allowance, which will become effective in the upcoming fiscal year 2082/83. Beyond the base pay, government teachers continue to benefit from a robust and comprehensive package of allowances, including festival and housing allowances, extensive medical benefits, and critical long-term social security provisions such as a contributory pension scheme and mandatory Social Security Fund (SSF) contributions.

The government’s approach to teacher compensation reflects a delicate balancing act between managing fiscal constraints and the imperative to support its civil servants. While the stagnant base salaries may lead to a real-terms decrease in income due to inflation, the increased dearness allowance, coupled with the comprehensive benefits package, aims to provide a degree of stability and long-term financial security. This strategy positions government teaching as a stable and secure career path, even if it does not consistently offer the highest nominal monthly income when compared to certain private sector roles. The decision to increase allowances for the next fiscal year, rather than implementing a base salary hike for the current one, demonstrates a strategy of fiscal prudence. This approach addresses immediate inflation concerns without committing to a higher, permanent salary base, which would have compounding and more substantial effects on future budgets and pension liabilities.

The long-term outlook for government teacher compensation in Nepal will continue to be shaped by a confluence of factors, including the nation’s overall economic growth, the government’s fiscal health, and its evolving commitment to public sector welfare and educational development. Future revisions to compensation are likely to depend on the government’s ability to generate sufficient revenue and its shifting policy priorities. The emphasis on stability, long-term benefits, and targeted allowances suggests a government that is managing limited resources while striving to maintain the attractiveness of public service and ensure the continued provision of essential services like education. This implies a reliance on the appeal of job security and comprehensive welfare programs to sustain its dedicated workforce.