--- title: "Sri Lanka" id: "11894" type: "global-payroll" slug: "sri-lanka" published_at: "2025-08-05T10:59:34+00:00" modified_at: "2026-11-02T19:37:18+00:00" url: "https://topsourceworldwide.com/global-payroll/sri-lanka/" markdown_url: "https://topsourceworldwide.com/global-payroll/sri-lanka.md" taxonomy_continent: - "Asia" --- # Payroll Services in Sri Lanka Fully managed payroll in Sri Lanka: APIT deductions, EPF at 12% and 8%, ETF at 3% and every monthly deadline, with a named specialist a phone call away. [Get in touch](https://topsourceworldwide.com/contact-us/) TopSource rated 5/5 by our customers - - - - - [Read reviews](#testimonials) ## What a payroll outsourcing company in Sri Lanka handles for you Sri Lankan payroll has changed fast. The tax-free threshold rose to Rs 150,000 a month in April 2025, the national minimum wage reached Rs 30,000 in January 2026, and a unified labour code has been promised before the end of 2026. ### APIT from Rs 150,000 a month Employers deduct Advance Personal Income Tax (APIT) under the Inland Revenue’s tax tables. Monthly pay up to Rs 150,000 is free of tax, and the rate then rises through 6%, 18%, 24% and 30% to 36%. ### EPF at 12% and 8% The Employees’ Provident Fund takes 12% of total earnings from the employer and 8% from the employee, with no salary cap. It is due by the last working day of the following month. ### ETF at 3% The Employees’ Trust Fund is paid by the employer alone, at 3% of total earnings, by the same deadline. Late payment brings a surcharge of 5% to 50%, depending on the delay. ### Gratuity and termination rules Employees with five years’ service at employers with 15 or more workers earn gratuity of half a month’s pay per year. Non-disciplinary termination generally needs consent or the Commissioner General’s approval. ### Minimum wage of Rs 30,000 Since 1 January 2026 the national minimum wage is Rs 30,000 a month or Rs 1,200 a day. Wages Boards can set higher rates for their industries. ## Our Partners Globally ## Know your Sri Lanka hiring costs before you commit Tell us the role and the salary. We’ll send back the full employer cost and net pay within one business day. [Get a Custom Payroll Quote](https://topsourceworldwide.com/contact-us/) > “Their expertise and understanding of the unique hiring, payment, and human resource practices in each country has been nothing short of outstanding. Our Client Success Manager, has done just that … ensured our success. Her availability and willingness to engage on a personal level has made all the difference.” Director of Research Operations, > “Excellent service, especially from our account manager who has gone above and beyond to help us use the platform effectively. Our manager, significantly simplifies my workload. It is like having your own TopSource HR representative on your team.” Chief Human Resources Officer, > “TopSource has been our go-to resource for international hiring. They are responsive, thorough, respectful and knowledgeable. The Client Success team has provided us with the utmost customer service, and the more we use TopSource, the more, it gives us access to more resources and knowledge.” Senior Manager, Human Resources , ## Employer Costs in Sri Lanka Explained Employers in Sri Lanka pay 15% on top of total earnings in 2026: 12% to EPF and 3% to ETF. Employees pay 8% to EPF, and APIT comes out of pay above Rs 150,000 a month. #### EPF and ETF EPF is 12% from the employer and 8% from the employee, and ETF is 3% from the employer. Both apply to total earnings with no salary cap, and the Budgetary Relief Allowance has been part of the minimum wage since March 2025. Both are due by the last working day of the following month. ETF surcharges run from 5% for a delay of up to 10 days to 50% for more than 12 months, and EPF also charges surcharges according to the delay. #### APIT on employment income Employers deduct APIT using the Inland Revenue’s tax tables and pay it by the 15th of the following month. Under Table 01, regular monthly pay up to Rs 150,000 is free of tax, or Rs 1,800,000 a year. Employees whose only income is employment income under APIT, with interest income below Rs 5,000, no longer have to file a return, under the Inland Revenue (Amendment) Act No. 11 of 2026. The same Act gives a tax credit on salary arrears. #### Gratuity and termination Under the Payment of Gratuity Act, employers with 15 or more workers owe half a month’s pay per year of service when an employee leaves after at least five years. Plan for it as a liability from the first day. Outside disciplinary cases, termination generally needs the employee’s consent or the Commissioner General of Labour’s prior written approval under the Termination of Employment of Workmen Act, which adds its own compensation. #### What a Sri Lankan employee actually costs For an employee on Rs 250,000 a month, the employer pays Rs 30,000 to EPF and Rs 7,500 to ETF, for a monthly cost of Rs 287,500. The employee pays Rs 20,000 to EPF and Rs 8,000 in APIT, and takes home Rs 222,000 a month. #### Working time, leave and the coming labour code Under the Shop and Office Employees Act the week is up to 45 hours and overtime is paid at 1.5 times normal pay. Leave is 14 days of annual leave from the third calendar year, on a sliding scale in the second, plus 7 days of casual leave. Maternity leave is 84 days for a live birth. The Labour Minister has promised a unified labour code before the end of 2026, but no draft has been published. Wages Boards set separate terms in the industries they cover. ## Sri Lanka payroll contributions and rates, 2026 | Item | Employer | Employee | Applies to | | --- | --- | --- | --- | | Employees’ Provident Fund (EPF) | 12% | 8% | Total earnings, no cap | | Employees’ Trust Fund (ETF) | 3% | None | Total earnings, no cap | | APIT | None | 0% to 36% | Monthly pay above Rs 150,000 | | APIT payment | By the 15th | | Of the following month | | EPF and ETF payment | Last working day | | Of the following month | | Gratuity | Half a month’s pay a year | | After 5 years, employers with 15 or more workers | | Minimum wage | Rs 30,000 a month | | Or Rs 1,200 a day, since 1 January 2026 | ### APIT on regular monthly pay in Sri Lanka (Tax Table 01) | Monthly regular pay | Tax deduction | | --- | --- | | Up to Rs 150,000 | None | | Rs 150,001 to Rs 233,333 | 6% of pay less Rs 9,000 | | Rs 233,334 to Rs 275,000 | 18% of pay less Rs 37,000 | | Rs 275,001 to Rs 316,667 | 24% of pay less Rs 53,500 | | Rs 316,668 to Rs 358,333 | 30% of pay less Rs 72,500 | | Above Rs 358,333 | 36% of pay less Rs 94,000 | ### Gross to net and employer cost in Sri Lanka, monthly | Monthly gross pay | Employee EPF | APIT | Net pay | Employer EPF and ETF | Total employer cost | | --- | --- | --- | --- | --- | --- | | Rs 100,000 | Rs 8,000 | None | Rs 92,000 | Rs 15,000 | Rs 115,000 | | Rs 250,000 | Rs 20,000 | Rs 8,000 | Rs 222,000 | Rs 37,500 | Rs 287,500 | | Rs 500,000 | Rs 40,000 | Rs 86,000 | Rs 374,000 | Rs 75,000 | Rs 575,000 | The tables assume a resident employee with one employment and regular monthly pay only, using the Inland Revenue’s Table 01 for the year of assessment 2025/26. Gratuity is not included. These are TopSource calculations from the verified rates. Rates and thresholds shown were verified on 2 November 2026 against the Inland Revenue’s APIT tables for 2025/26, the EPF and ETF rules, and the National Minimum Wage of Workers (Amendment) Act No. 11 of 2025. This page is general information, not tax or legal advice. [Get a Custom Payroll Quote](https://topsourceworldwide.com/contact-us/) ## How our Sri Lanka payroll service works 1. Map your setup We confirm your company registration, your tax, EPF and ETF numbers, and whether the Shop and Office Employees Act or a Wages Board sets each employee’s terms. 2. Migrate or onboard New hires’ tax declarations are collected, foreign employees’ visas are checked, and year-to-date pay, tax, EPF and leave balances are carried across. 3. Run and review Each month you receive a payroll report for approval before anything is paid: gross to net per employee and every tax and contribution line, with variances explained. Nothing is paid until you approve it. 4. File and pay We pay APIT by the 15th, pay EPF and ETF by the last working day of the following month, and issue employees’ T-10 tax deduction certificates. 5. Stay current Tax tables, the minimum wage and the labour code have all been moving since 2025. We apply each change as it takes effect and re-verify the figures on this page. ## Why Choose TopSource for Global Payroll in Sri Lanka TopSource for payroll, Employer of Record or any other of our services represents a simpler, more reliable and transparent option. If you would rather not employ staff in Sri Lanka directly, our [Employer of Record in Sri Lanka](https://topsourceworldwide.com/employer-of-record/sri-lanka/) can employ them on your behalf. We don’t hide fees or sneak price increases. We run Sri Lankan payroll in-house and file under your own registration rather than a bureau’s, so the same team that pays your salaries answers your calls. You get a named account manager, one consolidated monthly invoice covering salaries, contributions and fees, and one live Portico view of Sri Lanka beside every other country we run for you, across South Asia and beyond. Portico syncs with your time-tracking, leave and HR systems via API – set up by our onboarding team, not left to yours. GDPR, SOC 2 and ISO 27001 certified. [Global Payroll](https://topsourceworldwide.com/global-payroll/) [Get Started](https://topsourceworldwide.com/contact-us/) ## Other services Accelerating your growth in Sri Lanka and beyond #### TopSource goes far beyond payroll, acting as your end-to-end partner in global workforce management. From Employer of Record (EOR) services and seamless entity setup to localized accountancy and fractional HR support, we cover every aspect of international employment. ### Global Employer of Record (EOR) services With our Global EOR services, you can hire talent in any country without establishing a legal entity. We handle employment contracts, payroll, benefits, and compliance on your behalf, enabling fast, risk-free global expansion. ### Actionable HR Advisory On demand access to our fractional and regional HR professionals who understand local laws, cultures, and best practices. Bespoke talent intelligence including salary, business and talent market benchmarking. ### Global entity management Our global entity management team helps you establish and maintain your corporate entities worldwide. We ensure full compliance with local laws and regulations, streamline administrative processes, and minimize risk — so you can focus on growing your business. ### Accounting We offer comprehensive accounting solutions tailored to meet your international needs. From bookkeeping and financial reporting to tax filings and audits, our services help you maintain transparency, accuracy, and compliance in every jurisdiction. ## Meet our experts for Sri Lanka Whether you’re entering the market or scaling operations, our specialists provide the insight and guidance you need to succeed in one of the world’s most dynamic and regulated employment landscapes. With TopSource, you’re backed by real experts, every step of the way. [Our People](https://topsourceworldwide.com/our-people/) ## Beyond a payroll service **A globalization accelerator** A payroll platform for your employees is just the beginning. We are constantly evaluating your entire organisation to identify compliance issues and ways to accelerate your global growth. - [Payroll platform](#) - [Audit](#) - [Intelligence](#) - [Advisory](#) ##### Payroll platform ###### Global payroll simplified Your intuitive hub for paying global teams. Simple, powerful, and designed to scale with you — no complexity, just clarity. ##### Audit ###### Eliminate barriers to growth Avoid compliance issues across your global workforce and uncover opportunities to improve profitability. On a quarterly basis we’ll help you audit your global talent strategy to ensure it aligns with your business goals. ##### Intelligence ###### Build a data-driven talent strategy Grow confidently and profitably with access to the latest TopSource insights & data on hiring markets, salary benchmarking & benefits. ##### Advisory ###### Expert guidance that turns complexity into clarity. Whether you’re managing a global acquisition or entering a new market, you get clear guidance to navigate complex decisions, avoid delays, and accelerate your global expansion. ## Sri Lanka payroll FAQs ### What are employer payroll contributions in Sri Lanka in 2026? 15% of total earnings: 12% to the Employees’ Provident Fund and 3% to the Employees’ Trust Fund, with no salary cap. Gratuity is a separate liability when an employee leaves after five years. ### What is the APIT threshold in Sri Lanka? Rs 150,000 a month, or Rs 1,800,000 a year. Regular monthly pay above that is taxed at rates from 6% to 36% under the Inland Revenue’s Tax Table 01, and the employer deducts it from pay. ### When are EPF, ETF and APIT due in Sri Lanka? APIT is due by the 15th of the following month. EPF and ETF are due by the last working day of the following month, and late payment brings surcharges. ### How much does it cost to employ someone in Sri Lanka? An employee on Rs 250,000 a month costs Rs 287,500 with EPF and ETF, and takes home Rs 222,000. Tell us the role and salary and we’ll send the full cost within one business day. ### What is the minimum wage in Sri Lanka in 2026? The national minimum wage is Rs 30,000 a month or Rs 1,200 a day since 1 January 2026, under the amendment Act No. 11 of 2025. Wages Boards can set higher rates in their industries. ### How is gratuity calculated in Sri Lanka? At half a month’s pay for each year of service, for employees who leave after at least five years, at employers with 15 or more workers. It is separate from termination compensation. ### Do employees in Sri Lanka have to file a tax return? Not if their only income is employment income under APIT, with interest income below Rs 5,000. The Inland Revenue (Amendment) Act No. 11 of 2026 removed that requirement, with effect from 1 April 2025. ### How many days of leave do employees get in Sri Lanka? Under the Shop and Office Employees Act, 14 days of annual leave from the third calendar year, with a sliding scale in the second, plus 7 days of casual leave. Maternity leave is 84 days for a live birth. ### Is a new labour law coming in Sri Lanka? The Labour Minister has promised a unified labour code before the end of 2026, but no draft has been published. Current Acts, including the Shop and Office Employees Act and the Wages Boards Ordinance, still apply. ### Can a foreign company run payroll in Sri Lanka without an entity? Running payroll in Sri Lanka means a registered company or branch with tax, EPF and ETF numbers. TopSource can run payroll for your Sri Lankan entity or employ your team through our Employer of Record service. [Couldn’t find what you were looking for?](/contact-us/) ## Looking at other markets too? We help organizations employ and pay teams in 164 countries. 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Dollar](https://topsourceworldwide.com/global-payroll/saipan/) [San Marino Capital: City of San Marino Currency: Euro](https://topsourceworldwide.com/global-payroll/san-marino/) [Saudi Arabia Capital: Riyadh Currency: Riyal](https://topsourceworldwide.com/global-payroll/saudi-arabia/) [Senegal Capital: Dakar Currency: West African CFA franc](https://topsourceworldwide.com/global-payroll/senegal/) [Serbia Capital: Belgrade Currency: Serbian dinar](https://topsourceworldwide.com/global-payroll/serbia/) [Seychelles Capital: Victoria Currency: Seychellois Rupee](https://topsourceworldwide.com/global-payroll/seychelles/) [Slovakia Capital: Bratislava Currency: Euro](https://topsourceworldwide.com/global-payroll/slovakia/) [Slovenia Capital: Ljubljana Currency: Euro](https://topsourceworldwide.com/global-payroll/slovenia/) [Solomon Island Capital: Honiara Currency: Solomon Islands Dollar](https://topsourceworldwide.com/global-payroll/solomon-island/) [South Korea Capital: Seoul Currency: Won](https://topsourceworldwide.com/global-payroll/south-korea/) [South Sudan Capital: Juba Currency: South Sudanese Pound](https://topsourceworldwide.com/global-payroll/south-sudan/) [Sri Lanka Capital: Colombo Currency: Sri Lankan Rupee](https://topsourceworldwide.com/global-payroll/sri-lanka/) [Sudan Capital: Khartoum Currency: Sudanese Pound](https://topsourceworldwide.com/global-payroll/sudan/) [Sweden Capital: Stockholm Currency: Swedish krona](https://topsourceworldwide.com/global-payroll/sweden/) [Taiwan Capital: Taipei Currency: Dollar](https://topsourceworldwide.com/global-payroll/taiwan/) [Thailand Capital: Bangkok Currency: Thai Baht](https://topsourceworldwide.com/global-payroll/thailand/) [Trinidad & Tobago Capital: Port of Spain Currency: Trinidad and Tobago dollar](https://topsourceworldwide.com/global-payroll/trinidad-tobago/) [Tunisia Capital: Tunis Currency: Tunisian Dinar](https://topsourceworldwide.com/global-payroll/tunisia/) [Uganda Capital: Kampala Currency: Ugandan Shilling](https://topsourceworldwide.com/global-payroll/uganda/) [US Virgin Island Capital: Charlotte Amalie Currency: Dollar](https://topsourceworldwide.com/global-payroll/us-virgin-island/) [Venezuela Capital: Caracas Currency: Venezuelan bolívar](https://topsourceworldwide.com/global-payroll/venezuela/) [Zambia Capital: Lusaka Currency: Zambian Kwacha](https://topsourceworldwide.com/global-payroll/zambia/) [Zimbabwe Capital: Harare Currency: Zimbabwe Gold (ZiG)](https://topsourceworldwide.com/global-payroll/zimbabwe/) Load more