Salary every 15 days? Nepal to pay govt employees twice a month. Here’s why

Nepal has announced a shift from monthly to fortnightly salary payments for government employees, in a move officials say could help stimulate economic activity and improve cash flow across the country. The decision was taken by the finance ministry on Friday, with a circular already issued to relevant government agencies to begin preparations for implementation. Under the new system, civil servants and other state employees will be paid twice a month instead of the traditional once-a-month schedule.

Government officials said the policy is aimed at revitalising the economy by putting money into the hands of employees more frequently, thereby encouraging higher and more regular spending. They added that improved cash flow could help sustain economic circulation, particularly in a country where public sector employment forms a significant part of the formal workforce.

Officials believe the move could create a multiplier effect on consumption, as more frequent pay cycles may lead to steadier spending patterns. While uncommon globally, the approach mirrors salary systems followed in countries such as the United States, Brazil and Australia, where biweekly or fortnightly payments are more widely practised.

Within South Asia, however, Nepal’s decision marks a clear departure from the norm. Countries including India, Pakistan, Bangladesh, Bhutan, Sri Lanka and the Maldives continue to follow a monthly salary system for government employees.

Despite the policy announcement, legal challenges remain. Nepal’s Civil Service Act currently mandates monthly salary payments, with Section 28 stating that civil servants are to receive their pay and allowances only after the completion of each month. This means amendments to existing legislation may be required before the new system can be fully implemented.

Dipak Lamichhane, spokesperson for the Financial Comptroller General Office, said there were no technical barriers to executing the change. “Technically, there is no problem for us to implement this system,” he told IANS, adding that salaries for civil servants, the Nepal Army, Police and Armed Police Force could be released at any time.

However, he acknowledged the legal constraints, saying, “Perhaps some way out could be found to implement the government’s decision early.” With parliament not currently in session, the government may consider introducing an ordinance to fast-track the rollout. Authorities said discussions are ongoing on how best to operationalise the decision, but it remains unclear when the new payment system will formally come into effect.