Nepal, located in South Asia, has an average base salary of NPR 80,700 (Nepali Rupees) per month, which is around USD 664 as per the exchange rates of March 2022.
However, if you’re looking to outsource your business to Nepal, this statistic alone won’t be enough. You’ll need a detailed study into the salary rates, cost of living, and various factors influencing your business.
In this article, we’ll discuss the average salary in Nepal, along with its various salary statistics and cost of living. Further, we’ll cover the three benefits of outsourcing to Nepal.
Table of Contents
- Average Salary in Nepal: Statistics and Trends
- 4 Factors that Influence Salaries in Nepal
- Bonus and Incentives in Nepal
- The Cost of Living in Nepal
- Top 4 Benefits of Outsourcing to Nepal
Average Salary in Nepal: Statistics and Trends
The average annual salary in Nepal is 969,000 NPR per year (approximately USD 7,949.03), according to the exchange rates of March 2022.
However, it’s impossible to get a complete picture of Nepal’s economy without the following factors:
- Job type.
- Cost of living.
- And more.
So, you need to consider these factors before outsourcing your business or paying your Nepalese employees.
But before moving on to them, let’s explore the different aspects of Nepal’s salaries.
A. Average Salary Range
An employee in Nepal may earn an average minimum salary of 20,400 NPR (USD 167.35) and a maximum average salary of 360,000 NPR (USD 2,953.20) per month.
Note: The average salary range figures represent the average minimum and maximum salary. The actual maximum salary and minimum salary may differ.
B. Median Salary
Median salary refers to the mid-value of salaries when arranged in ascending or descending order. It can also be used in industries and organizations to determine their mid-point salary.
The median salary will help you see how much people earn, decide appropriate salaries according to industries, and negotiate salaries during interviews.
According to Salary Explorer, the median salary in Nepal is 84,000 NPR or USD 691.16 per month.
This means that half of the employees earn more than 84,000 NPR while others earn less than 84,000 NPR.
C. Minimum Wage
The minimum wage of a country refers to the lowest remuneration a recruiter must pay for an employee’s service.
Presently, the minimum wage in Nepal is NPR 15,000 per month, which roughly translates to USD 123. A Nepalese employee earns an hourly wage of roughly 470 NPR (USD 3.86). This is lower than most developed countries like the United States (USD 7.25), the United Kingdom (USD 11.73), etc.
D. Annual Increment
Here’s a list of different industries in Nepal and their increment rates:
|Industry||Annual Increment (in percentage)|
Note: The salary estimates mentioned in this article should only be taken as guidelines. Individual salaries may differ based on various factors such as education, cost of living, location, and industry.
But what are the factors that determine the salary in Nepal? Let’s check them out.
4 Factors that Influence Salaries in Nepal
Let’s look at the five factors influencing and contributing to Nepal’s salaries.
Employees with higher education enjoy high-paying jobs. Here’s how salary figures vary according to the educational qualifications of the Nepalese employees:
- A diploma holder would typically earn 17% more than their peers with a high school education.
- A graduate could get 24% more than people with diplomas.
- A post-graduate may earn 29% more than someone with a Bachelor’s degree.
- Employees with a Ph.D. degree can enjoy an increased salary that’s around 23% more than the employees with a post-graduate degree.
A health care employee receives the highest salary in Nepal, with dentistry being the highest paying job. Let’s look at an industry-wise breakdown of the average salaries in Nepal:
|Job Title||Average Monthly Salary|
|Chief Executive Officer||182,000 NPR|
|Bank Branch Manager||144,000 NPR|
|General Manager||143,000 NPR|
|Information Technology Manager||133,000 NPR|
|Accounting Manager||120,000 NPR|
|Human Resources Manager||114,000 NPR|
|Project Manager||87,800 NPR|
|Mechanical Engineer||77,600 NPR|
|Civil Engineer||73,600 NPR|
|Chartered Accountant||70,100 NPR|
|Graphic Designer||50,600 NPR|
Like in any other country, experienced employees are in demand in Nepal too. Here’s how salary rates increase right from the entry-level according to years of experience:
|Experience Level||Salary Increase (in percentage)|
|Fresher – Junior Level||3% – 5%|
|Mid-career Level||6% – 9%|
|Senior Management||10% – 15%|
|Top Management||15% – 20%|
Salaries also vary according to different cities. For instance, Kathmandu offers an average monthly salary of approximately 86,900 NPR. Meanwhile, employees of another Nepalese city, Pokhara, will have an average monthly salary of around 80,700 NPR.
Disclaimer: This article’s average wage and salary figures are taken from various independent salary surveys. These figures are only intended as general guidelines and not exact values.
Bonus and Incentives in Nepal
Employees in Nepal typically receive bonuses ranging from 3% to 6% of their annual salary.
According to Salary Explorer’s survey of 2022, 37% of the employees in Nepal reported that they received some kind of monetary bonus in the previous fiscal year.
The cost of living also influences employee salaries in a region. Let’s check out if your employees’ salaries can cover their expenses.
The Cost of Living in Nepal
The cost of living refers to the amount of money Nepalese people need to pay for basic amenities like accommodation, transportation, food, water, etc.
Nepal’s cost of living may be lower than countries like the United Arab Emirates and Germany. However, it’s still higher than some neighboring countries like Pakistan.
The monthly cost of living for a family of four would be around 146,589 NPR (USD 1,198), while for an individual, it may be approximately 41,184 NPR (USD 367) per month.
Like most countries, renting a home in Nepal’s city center is more expensive than in the outskirts.
For instance, renting a single bedroom could cost around 13,855.93 NPR (USD 114) per month in the city center or about 9,938.78 NPR (USD 82) per month in the city outskirts.
Eating out at an inexpensive restaurant may just cost around 250 NPR (US 2.05). Meanwhile, a meal for two at a mid-range restaurant may cost approximately 1,950 NPR (USD 16) monthly.
If you’re still hesitant about investing in Nepal, check out how outsourcing will help your business.
Top 4 Benefits of Outsourcing to Nepal
Nepal offers a package of benefits to attract foreign companies into the country. Here are some of them:
1. Affordable Labor
The two reasons that contribute to an affordable workforce in Nepal are: low cost of living and low average wages.
Nepal is among the top 20 countries with the lowest average income per month, ranking lower than countries like India, Russia, Bangladesh, etc. A low average income means that the average maximum wage will be much lower than in most developed countries.
According to the IMF (International Monetary Fund), Nepal is one of the few countries in South and Central Asia to have the lowest annual cost of living, around 4,460 International dollars per capita.
As a result, you can increase your production capacity at a much lower cost than other developing and developed countries like the United States, China, etc.
2. Skilled Workforce
Along with cheap labor, one of the main reasons that motivate organizations to outsource business is the availability of a skilled, educated workforce at affordable rates.
Nepal boasts a young, skilled, English-speaking population. The highly skilled population is also fluent in technology, with many adopting various technology fields like software engineering, web development, etc., as their careers.
To further encourage the Nepalese people, the government promotes an Information and Communication Technology (ICT)-focused education. This develops the skill needed for their workplaces.
Over 5000 graduates enter its booming IT and BPO sector every year, attracting many foreign businesses to invest in the country.
3. Convenient Transportation
Nepal offers a well-connected transportation system consisting of public buses, minivans, microbuses, metered taxis, domestic flights, etc.
A one-sided local transport journey costs around 20 NPR (USD 0.16), whereas a monthly pass can amount to 900 NPR (USD 7.38). Employees can also ride in taxis that charge 120.70 NPR (0.99 USD) for one mile.
If you’re going to set up your business in Kathmandu, your employees can use the Sajha Yatayat public buses that offer rides all over the Kathmandu Valley.
4. Government Support
The Nepalese government believes in sustainable economic growth in the private and public sector, aiming to substitute trade deficits and imports with export-worthy industries.
As a result, it takes special care to promote the IT and BPO sectors because of their export potential. The Nepal Trade Integration Strategy, 2010 even lists IT as one of its 19 important sectors for foreign investment.
To attract foreign businesses to the country, the government also provides tax exemptions such as:
- 50% tax exemption for specific industries like software development, digital mapping, information processing, telecommunications, etc.
- 15% tax rate exemption for ICT companies enlisted in the stock exchange.
- 10% partial income tax refund for ICT businesses that employ at least 300 Nepalese nationals.
The economic reforms, skilled population, and government support ensure foreign companies a smooth transition into the country.
Nepal has been slowly and steadily making strides as an attractive outsourcing country in Asia – especially with labor wages increasing in its neighboring countries like India and China.
The incredibly skilled, affordable workforce and economically conducive business environment make Nepal a promising outsourcing destination, helping you scale your business at a lower cost.
If you’re confused, use our comprehensive guide on Nepal’s average salary to determine if Nepal is the right choice for your business and plan your move wisely.