Pregnant women giving birth in Nepal need to use out-of-pocket payment for delivery care services due to a lack of insurance policies. The objective of this study was to examine the ability of pregnant Nepalese women to pay for delivery care services and the effects of the current household health expenditure on impoverishment due to hospital-based delivery services, especially normal delivery (ND) and caesarean section (CS). A cross-sectional study was conducted from May to August 2009 at Tribhuvan University Teaching Hospital. Ability to pay was defined as the current health spending being less than 5% of annual household income. Poverty occurred when a household's per capita income fell to less than US$1 per day. Impoverishment was considered as poverty headcount and normalised poverty gap. On average, the percentage of annual household income spent on current delivery care was 5.9% in the ND group and 9.7% in the CS group. The CS group had a stronger impoverishment effect resulting in a high per cent change of payment-induced poverty headcount by 78.1% and poverty gap by 97.3% compared to 7.7 and 24.1% in the ND group, respectively. There is a strong need to develop a well-prepared financial system to prevent the issue of poverty and impoverishment.