In July 2025, the Ministry of Labour, Employment and Social Security Nepal (MOLESS) announced the revised national minimum wage for workers and employees to be set at NPR. 19,550 per month. The revised wages are set immediately effective from July 15, 2025 (Shrawan 1, 2082 B.S) onwards, a long-awaited move celebrated by workers and trade unions, and seen by the policymakers as a step towards social justice. The revised wages have been increased from NPR 17,300 to NPR. 19,550. Before we understand what this wage jump means, let’s start off by understanding what these wages are.
Figure 1: Ministry of Labour, Employment and Social Security, Nepal (Ministry of Labour, Employment and Social Security, Nepal)
What Are Minimum Wages?
Minimum wages are the lowest amount of pay that an employer is legally obligated to pay an employee for their work. i.e, it is the price floor; no employer can pay lower than the amount set by the government. In the case of Nepal, the new minimum wage has been set to NPR. 19,550, where every employer is required to pay this amount to its full-time employee. This amount is the basic legal right of every worker working full-time, regardless of the type of job/sector. Additionally, the government has also set a minimum hourly pay rate of NPR. 101, for full-time workers, and NPR. 107 for part-time workers.
Wait a second! Why is a part-time employee paid more in hourly wages than a full-time employee?
The difference of NPR. 6 per hour is because part-time employees typically don’t receive added benefits such as paid leave, insurance, or other allowances (e.g., Dashain bonus). To ensure equity, their hourly rate is kept slightly higher.
Coming back to the minimum wages, the following table presents a simplified version of the wage distribution:
This change means that minimum wage workers will now earn NPR 2,250 more every month than before.
Why is this important?
For all workers, this only sounds better. Earning more money also gives the ability to spend more money, whether it’s rent, food, or other goods. This wage revision is absolutely needed, and the Labour Act of Nepal processes such revisions every two years on a mandatory notice. This helps adjust the minimum wages according to inflation rates, and ensures that a minimum wage worker is capable of ensuring their own basic commodities (food, shelter, clothes).
Where is the problem?
At this point, you may be questioning what the problem is. But here’s the concern: while the wages have increased, prices of necessary and basic goods like rice, fuel, and rent, too, have increased simultaneously.
This raises the question: Is NPR 19,550 enough? The government says it is, but is it just an illusion in the face of inflation?
A single worker earning minimum wage will still struggle in major cities like Kathmandu, Pokhara, etc., where monthly household expenses for even a small family easily exceed NPR 30,000. An argument may be that in rural areas, the minimum wage makes sense since the costs of rent, education, and food are relatively lower, but this is only if the employers actually pay for it.
A quick Google search shows that Nepal’s informal economy sector is estimated at 51% while the global average rests at 11.8% (MyRepublica). This means that over 51% of the nation’s economy avoids paying VAT and personal tax, and formal obligations. What this also means is that they are not legally established, and the government rules for wages don’t apply to them. If a factory, farm, or shop isn’t formally recognized by the government, the law can’t enforce what those workers are paid. The General Federation of Nepalese Trade Unions (GEFONT) had also reported that 29% of Nepalese Business Firms did not pay the minimum wage of NPR 17,300 in 2024 among other violations of Labour rights in Nepal (Labour Audit Report’2024, GEFONT). This percentage could only be projected to rise onwards with firms requiring to pay even more. With over half the economy still informal, many workers may never see this wage in reality.
While there are many problems still lingering around, Nepal is taking crucial steps towards pursuing socio-economic justice and equity. The higher minimum wages can help reduce the Gini Coefficient, a statistical measure of inequality ranging from 0-1. Nepal’s gini coefficient is already at 0.30 (World Bank, 2022) which could only be improved by the new revision.
By helping the lowest-paid workers in the economy, the income gap between higher earners and minimum-wage workers narrows, even if it’s by NPR. 2,250. Secondly, even this small difference allows more income in the worker’s hands, increasing spending power and allowing them a small breathing space. This small breathing space can create a positive cycle of spending in the economy, which is especially important in Nepal, as our country is a consumption-based economy.
The Takeaway
The new minimum wage of NPR 19,550 is, in fact, a victory in the face of workers. It recognizes the rights of workers and offers breathing space for struggling families, standing as a symbol of movement towards equity. Yet it is also a challenge in itself. It is important for the Nepalese Government to make strict decisions and improve their implementation of labour laws and protect the rights of workers. For this, structural reforms are required. Our first step should be to convert ourselves into a formal economy, without which, workers won’t feel the benefits of laws on papers. The government’s next goal should be ensuring that this victory isn’t just on paper, but a reality in actual workplaces.
Now, let’s take a break and ask ourselves: Is raising the minimum wage enough to tackle inequality in Nepal, or are deeper reforms needed? Let’s hear your views in the comments.
Works Cited
Ministry of Labour, Employment and Social Security, Nepal.
“Press Release Regarding Minimum Wage 2082-04-2.” moless.gov.np,
Ministry of Labour, Employment and Social Security, Nepal, 2 Shrawan 2082, https://moless.gov.np/content/13291/press-release-related-press-release-remuneration-remained/. Accessed 5 Shrawan 2082.
MyRepublica. “Nepal’s informal economy estimated at 51% of GDP, global average rests at 11.8%.” Economy [Kathmandu], 14 May 2025,
https://myrepublica.nagariknetwork.com/news/nepals-informal-economy-estimated-at-51-of-gdp-global-average-rests-at-118-48-76.html. Accessed 26 8 2025.
MyRepublica: Nagarik Network. “29% of firms in Nepal violate minimum wage rule of Rs 17,300 a month: GEFONT.” MyRepublica [Kathmandu], 2 5 2025,
https://myrepublica.nagariknetwork.com/news/29-of-firms-in-nepal-violate-minimum-wage-rule-of-rs-17300-a-month-gefont-71-49.html. Accessed 28 8 2025.