This paper estimates the vulnerability to the poverty level of the households in Nepal for an idiosyncratic shock using the third round of Nepal Living Standard Survey data. A feasible generalized least square technique is employed to calculate the vulnerability score, further disaggregated between rural-urban areas, provinces, and major caste/ethnic groups. The findings reveal that thirty-two percent of households are highly vulnerable, indicating that they have higher chances of falling below the poverty line due to death, illness, unemployment, and other household-specific shocks. The paper also finds that Karnali and Sudur Paschim Provinces have higher vulnerability than other provinces. Likewise, Dalits and Muslims have higher vulnerability scores compared to other castes / ethnic groups. The estimation suggests that the poverty incidence and vulnerability scores largely overlap, yet the vulnerability scores are consistently higher among all groups indicating a high risk of households falling into poverty. Therefore, it is desirable that major groups’ vulnerability profile, in addition to poverty profile, should be constructed and aligns the pro-poor policies to the vulnerable groups to mitigate the risks of pushing such vulnerable households below the poverty line.