The Dashain bonus, also known as the festival allowance or festival cost, is equal to one month's basic wage and is paid once each year. It is a right under Section 37 of the Labor Act of 2074, not a favor from the employer, and it is payable regardless of whether the company generated a profit. It is automatically paid during Dashain. Employees with less than a year of service receive a corresponding amount.
Dashain 2026: Ghatasthapana is on 11 October 2026 and Vijaya Dashami (Tika) is on 21 October 2026.
What is the Dashain bonus (festival allowance)?
Every autumn, Nepali workers ask the same question: "How much will I receive before Dashain?" People look for it as "Dashain bonus," "Dashain allowance," "festival bonus," or "festival allowance," however the phrase used in the statute is "festival expense."
The previous labor law linked the payment to Dashain by name. The Labor Act of 2074 includes neutral language to ensure that workers of all religions, cultures, and traditions are covered, but Dashain remains the normal payment time.
Dashain bonus rule in Nepal: what Section 37 says
Section 37 of the Labor Act 2074 (Entitlement to festival expense) sets out four rules in plain terms:
- Amount: each worker is entitled to one month's basic remuneration as festival expense every year.
- Choice of festival: a worker may make a written request to receive it once per fiscal year at the main festival of their own religion, culture or tradition.
- Default timing: if there is no such request, it is provided at the time of Dashain each year.
- Short service: a worker with less than one year of service on the payment date receives it in proportion to the service completed.
Who is eligible for the Dashain allowance?
- Workers covered by the Labor Act in the private sector are entitled, and Section 37 does not depend on the size of the business.
- New employees do not need to wait six months. They receive a prorated amount for the period served.
- Probationary and fixed-term workers are not excluded by the wording of Section 37, though the exact terms of a contract can matter.
- Workers who celebrate another festival (for example Eid, Christmas or Chhath) can ask in writing to be paid at that festival.
- Government and civil-service employees are governed by their own service rules rather than the Labor Act.
How to calculate the Dashain bonus in Nepal
The calculation is simple, but the base is where mistakes happen, it is basic salary, not gross salary or total compensation.
- Full year of service: Festival allowance = 1 month's basic salary
- Less than one year of service: Festival allowance = (monthly basic salary × months of service) ÷ 12
|
Case |
Monthly basic |
Service |
Festival allowance |
|
Full-year employee |
NPR 25,000 |
12+ months |
NPR 25,000 |
|
Joined mid-year |
NPR 30,000 |
8 months |
30,000 × 8 ÷ 12 = NPR 20,000 |
|
Minimum-wage worker (basic NPR 12,170 + dearness allowance NPR 7,380) |
NPR 12,170 |
12+ months |
NPR 12,170 |
Part-time workers: use the basic remuneration actually agreed for the part-time role. Do not reduce it a second time.
Deductions: withholding remuneration or benefits contrary to the Act is itself a violation, so employers should not make deductions from the allowance unless clearly lawful and documented.
When is the Dashain bonus given?
By default, at the time of Dashain. In practice, most employers pay a few days before Ghatasthapana or the main public holidays so that families can prepare for the festival.
Festival allowance vs profit bonus: what is the difference?
Many readers search for "bonus amount" are really comparing two separate entitlements. They come from different laws and work differently.
|
Festival allowance (Dashain bonus) |
Profit bonus |
|
|
Law |
Labor Act 2074, Section 37 |
Bonus Act 2030 (1974) |
|
Amount |
One month's basic salary |
A share of the enterprise's net profit |
|
Depending on profit? |
No |
Yes |
|
Frequency |
Once a year |
Annually, once accounts are finalized |
Paying one does not replace the other. An employer can owe both in the same year.
What to do if your employer does not pay the Dashain bonus
- Raise it in writing. Write to HR or management, cite Section 37 of the Labor Act 2074 and attach your latest salary slip.
- Send a formal demand. Set a short deadline and keep proof that it was delivered.
- Complain to the Labor Office. Under Section 163, the Labor Office can inquire into a complaint and direct an employer who has withheld or wrongly deducted remuneration or benefits to pay the amount, along with compensation of up to two times that amount.
- Escalate if needed. Unresolved disputes, and matters within its jurisdiction, can proceed to the Labor Court.
Documents to maintain include the appointment letter, salary slips showing basic pay, bank statements, and any communications with the employer regarding the allowance.
Checklist for employees
- Confirm each worker's basic salary rather than gross pay.
- Prorate the amount for staff with under one year of service.
- Check for written requests to receive the allowance at another festival.
- Pay by bank transfer and keep a calculation sheet and payment record.
- Budget the profit bonus separately from this annual cost.
Frequently asked questions
Q. How much Dashain bonus should I get in Nepal?
One month's basic salary per year. If you have served for less than one year, you receive a proportionate amount.
Q. Is the Dashain bonus mandatory in Nepal?
Yes. Section 37 of the Labor Act 2074 makes festival expense a legal entitlement for workers covered by the Act, whether or not the company made a profit.
Q. When is the Dashain bonus given?
At the time of Dashain, unless the worker has asked in writing to receive it at another festival. In 2026, Dashain begins on 11 October and Vijaya Dashami falls on 21 October.
Q. Is festival allowance calculated on basic or gross salary?
On basic salary only. Overtime, allowances and other variable payments are not the base.
Q. Do new employees get the Dashain allowance?
Yes, on a prorated basis. Section 37 does not set a 6-month waiting period.
Q. Is the Dashain bonus the same as the annual profit bonus?
No. The festival allowance comes from the Labor Act 2074 and is payable regardless of profit. The profit bonus comes from the Bonus Act 2030 and depends on the enterprise's net profit.
Q. Can non-Hindu employees claim festival allowance?
Yes. A worker can make a written request to receive it at the main festival of their own religion, culture or tradition.
Q. What can I do if my employer does not pay the Dashain bonus?
Raise it in writing, send a formal demand letter, and if it stays unpaid, file a complaint with the Labor Office. Unresolved matters can go to the Labor Court.
Conclusion
Dashain's bonus is not a gift. It is a legislative right to one month's basic wage per year, prorated for employees with less than a year of service, and payable regardless of corporate profits. Employers should compute it based on basic salary and pay it during Dashain, while employees who are unpaid can escalate the situation step by step, beginning with a written request to the Labor Office and, if required, the Labor Court. Knowing the rules, base, and timetable is the best approach to avoid disagreement during festival season.
Need any legal help?
Whether it is an employment matter, a contract, a property issue, a business registration or a dispute, the legal team at Nepal Lawyer is here to guide you. Speak with an experienced lawyer and get clear, practical advice for your situation.
Sources
- Labour Act 2074, Section 37: Entitlement to festival expense
- Labour Act 2074, Section 163: Power of the Department or Office to decide
- Labour Act 2074, Section 164: Decision may be made by the Labour Court
- The Labour Act, 2017 (2074), English text (PDF)
Disclaimer: This article is for general information only and does not constitute legal advice. Laws, rates and dates may change, and every situation is different. Please consult a qualified lawyer before acting on any information above.
