Calculate the total cost to employ someone in Sri Lanka for the 2025-2026 fiscal year. See employer EPF (12%), ETF (3%), APIT withholding, and full cost-to-company breakdown.
Enter a salary to see contributions
Enter a gross salary to see the full payroll cost breakdown
Better HR comes with fully localized payroll engines for Sri Lanka — handling tax, insurance, and contribution rules automatically.
Automatically calculates PIT for regular monthly employment income:
Progressive tax rates applied according to IRD Table 1Monthly taxable income calculated accuratelyStandard reliefs and exemptions applied correctlyAutomatic monthly tax withholding integrated into payrollSupports accurate tax calculation for lump sum payments:
Applies IRD Table 2 tax rates for bonuses, gratuity, and other lump sum paymentsAutomatically distinguishes between regular income and lump sum paymentsEnsures correct withholding and compliance with IRD requirementsAccurate EPF calculations for both employee and employer contributions:
Standard contribution ratesCorrect handling of salary components subject to EPFAutomatic calculation per payroll cycleSimplifies ETF contributions according to statutory requirements:
Employer contribution: 3% of employee’s gross salaryAutomatic calculation per payroll cycleEPF 12% contribution for Employer
Automatically calculates employer’s mandatory 12% contribution to EPFIntegrated with overall payroll for compliance and reportingBetter HR automates payroll tax calculations for Sri Lanka and 8 other countries. Accurate, compliant, done in minutes.
Try Better HR FreeEmployers in Sri Lanka contribute 12% of each employee's total monthly earnings to the Employees' Provident Fund (EPF). This is a mandatory cost on top of the gross salary. EPF applies from the first day of employment and covers all employees regardless of salary level. The employer must remit both the employer and employee EPF contributions to the Central Bank of Sri Lanka.
Employers contribute 3% of each employee's total monthly earnings to the Employees' Trust Fund (ETF). This is an additional cost borne entirely by the employer. ETF is not deducted from the employee's salary. Contributions must be remitted by the last working day of the following month.
Employees contribute 8% of their total monthly earnings to EPF. This amount is deducted from the employee's gross salary by the employer and remitted alongside the employer's 12% contribution. The employee's EPF contribution is deductible from taxable income when calculating APIT.
Employers must calculate and withhold Advance Personal Income Tax (APIT) monthly. Sri Lanka uses progressive tax rates from 6% to 36%. Personal relief is LKR 1,800,000 per year (LKR 150,000 per month), effective April 2025. APIT is calculated on taxable income after deducting the employee's 8% EPF contribution.
The total cost to employ someone in Sri Lanka is the gross salary plus employer EPF (12%) and employer ETF (3%), totaling 15% on top of gross salary. For example, an employee earning LKR 100,000 per month costs the employer LKR 115,000 per month: LKR 12,000 in EPF and LKR 3,000 in ETF.
Employers contribute 12% of each employee's total monthly earnings to the Employees' Provident Fund (EPF). This is paid on top of the employee's gross salary and is not deducted from their pay.
The Employees' Trust Fund (ETF) requires employers to contribute 3% of each employee's total monthly earnings. This cost is borne entirely by the employer. It is not deducted from the employee's salary.
The total cost is the employee's gross salary plus employer EPF (12%) and employer ETF (3%). This means the employer pays 15% on top of the gross salary. For a monthly salary of LKR 200,000, the total employer cost is LKR 230,000.
Employees contribute 8% of their total monthly earnings to EPF. This is deducted from their gross salary by the employer. Combined with the employer's 12%, the total EPF contribution is 20% of gross salary.
Yes. The employee's 8% EPF contribution is deducted from gross income before calculating APIT. This reduces the taxable income and the amount of income tax the employer needs to withhold.
Employers withhold APIT at progressive rates: 6% on the first LKR 1,000,000 of taxable income, 18% on the next LKR 500,000, 24% on the next LKR 500,000, 30% on the next LKR 500,000, and 36% on the balance. Personal relief is LKR 1,800,000 per year.
EPF contributions (both employer and employee portions) must be remitted to the Central Bank of Sri Lanka by the last working day of the following month. ETF contributions follow the same deadline and are remitted to the ETF Board.
No. Unlike some countries, Sri Lanka does not impose a salary cap on EPF or ETF contributions. Both employer and employee contributions are calculated on the full total monthly earnings without any ceiling.
Better HR automatically calculates employer EPF (12%), ETF (3%), employee EPF (8%), and APIT withholding using the latest rates. It generates payslips with full cost-to-company breakdowns and produces statutory reports for IRD, Central Bank, and ETF Board filing.
