Dashain Bonus Rule in Nepal: Festival Allowance Labour Act

Under Section 37 of the Labour Act 2074, every worker in Nepal is entitled to a festival allowance equal to one month's basic salary each year. Unless you ask in writing for it to be paid at your own main festival (such as Eid, Christmas, Lhosar or Chhath), it is paid at Dashain. If you have worked less than a year by the payment date, you get a proportional amount. It is a legal entitlement, not a discretionary "bonus". It is based on basic salary, not gross, and it is taxable as salary.

Dashain 2083: Ghatasthapana fell on Asoj 25, 2083 (11 October 2026), and Vijaya Dashami (Tika) is on 21 October 2026. Employers should pay the allowance before Dashain.

Dashain allowance at a glance

Dashain bonus rule in Nepal: what Section 37 says

37(1) Each labour shall be entitled to an amount equal to the basic remuneration of one month as the festival expense each year for the festival to be celebrated according to his or her religion, culture and tradition. 37(2) A labour may make a written request… at one time in one fiscal year on the occasion of the main festival… In the case absent such a request, the festival expense shall be provided at the time of Dashain festival every year. 37(3) A labour who has not completed one year of service period on or before the day of payment of the festival expense shall be entitled to such expense in proportion to the period of service he or she has completed.

Key points:

• Mandatory: the law says "shall be entitled". A company cannot skip it because it made a loss.
• Once per fiscal year, at Dashain by default or at your own main festival if you request it in writing.
• Basic, not gross: for the 2082 minimum wage that is Rs 12,170, not Rs 19,550. See Minimum Wage in Nepal.

What if your employer doesn't pay? (corrected enforcement section)

1. Complain within six months to the Labour Office, or through your trade union with your written consent (s.162).
2. The Labour Office can order the employer to pay the withheld amount plus compensation of up to twice that amount (s.163(2)(a): remuneration or benefits deducted contrary to the Act).
3. Either side can appeal to the Labour Court within 35 days (s.165).

(The Rs 100,000 / Rs 10,000-per-worker fines and the 2-year imprisonment that are often quoted relate to discrimination, missing appointment letters and forced labour respectively, not to festival allowance.)

Is the Dashain allowance taxable?

Yes. It is part of your employment income and is added to your annual taxable salary under the normal slab rates; there is no specific exemption for festival allowance. Estimate the effect with the salary and tax calculator.

FAQ

What is the Dashain bonus rule in Nepal? Section 37 of the Labour Act 2074 entitles every worker to one month's basic salary as festival allowance each year, paid at Dashain unless the worker requests another main festival in writing.

How much Dashain allowance will I get? One month's basic salary if you've worked a year or more; otherwise basic × months worked ÷ 12.

Can my employer refuse the Dashain allowance because of losses? No. It is a statutory entitlement, not a profit-linked bonus. You can complain to the Labour Office within six months.

Do new employees get Dashain allowance? Yes, pro-rata. Someone with Rs 20,000 basic who has worked 6 months gets Rs 10,000.

Is the Dashain allowance calculated on gross or basic salary? Basic salary. That is why the basic share of your pay matters.

Can I take it at Eid, Christmas or Lhosar instead? Yes. Make a written request to your employer, once per fiscal year, for your main festival.

Related

• Minimum Wage in Nepal
• PF, Gratuity & SSF in Nepal
• Nepal's SSF: Registration, Contribution & Benefits
• Minimum Wages in Nepal: The Raise No One Feels

Sources

• Labour Act, 2017 (2074), English translation by the Law Commission: s.37 (festival expense, verbatim above); s.162 (6-month complaint window); s.163(1)(c)–(d), s.163(2)(a) (penalty provisions); s.164(1) (forced labour); s.165 (appeal 35 days). https://antislaverylaw.ac.uk/wp-content/uploads/2019/08/The-Labour-Act-2017.pdf
• Minimum basic Rs 12,170 (2082 notice): Pioneer Law, https://pioneerlaw.com/?p=1333
• Live article (baseline): https://khatapana.com/blogs/538/dashain-bonus-or-festival-allowance-myths-rights-and-more