Sri Lanka Payroll

Sri Lanka Payroll Skill v0.1

Tier 2 — research-verified, pending accountant sign-off. Figures below are current for Sri Lanka's Year of Assessment 2025/2026 (1 April 2025 – 31 March 2026). The personal relief and APIT Table 01 monthly formula are extracted verbatim from the Inland Revenue Department (IRD) primary PDF; the EPF/ETF rates are from official EPF/ETF/Central Bank sources. APIT penalty amounts are corroborated from reputable Sri Lankan tax-advisory summaries of the Inland Revenue Act and carry a flag. Do not present any computation as definitive until a Sri Lanka-qualified tax practitioner (CA Sri Lanka member or equivalent) has signed off.

Section 1 — Quick Reference

Quick Reference

Field	Value
Country	Democratic Socialist Republic of Sri Lanka
Currency	Sri Lankan Rupee (LKR) only
Standard pay frequency	Monthly
Year of assessment	1 April – 31 March (e.g. 2025/2026 = 1 Apr 2025 – 31 Mar 2026) — IRD
Income-tax withholding system	APIT — Advance Personal Income Tax, the PAYE-style monthly withholding under the Inland Revenue Act No. 24 of 2017 (as amended) — IRD APIT Table 01
Tax authority	Inland Revenue Department (IRD)
Provident-fund authority	Employees' Provident Fund (EPF) — administered by the Central Bank / Dept. of Labour
Trust-fund authority	Employees' Trust Fund Board (ETF Board)
Key legislation	Inland Revenue Act No. 24 of 2017 (as amended); Employees' Provident Fund Act No. 15 of 1958; Employees' Trust Fund Act No. 46 of 1980
Filing channel	IRD e-filing (mandatory for all employers from Y/A 2023/2024)
Personal relief (tax-free)	LKR 1,800,000/year = LKR 150,000/month (raised from 1,200,000 effective 1 Apr 2025) — IRD APIT Table 01
Top marginal APIT rate	36% on annual taxable income above the 30% band — IRD APIT 2025/26 guideline
EPF total contribution	20% of total earnings (8% employee + 12% employer), no ceiling — EPF Act; EPF Employer FAQ
ETF contribution	3% of total earnings, employer-only — ETF Act; ETF Board
Validated by	Pending — requires sign-off by a Sri Lanka-qualified tax practitioner
Skill version	0.1

Section 2 — Income Tax Withholding (APIT)

The employer withholds APIT monthly under the Inland Revenue Act No. 24 of 2017 (as amended) and remits to the IRD. Sri Lanka has a genuine personal income tax; this is not a no-PIT jurisdiction. The monthly withholding uses APIT Table 01 for resident employees and Sri Lankan-citizen non-residents on primary employment. The personal relief of LKR 150,000/month has already been baked into the Table 01 formula (the "− subtract" term restores it).

Which APIT table applies. Table 01 covers resident employees and non-resident Sri Lankan citizens with a single (primary) employment; deduction is compulsory regardless of employee consent. Other tables exist for other situations — see Section 11. When the employee's category is unclear, refuse and ask (Refusal Catalogue, Section 7).

2.1 Annual progressive rate schedule (Y/A 2025/2026)

Annual progressive rate schedule (Y/A 2025/2026) (Source: IRD APIT 2025/2026 guideline — https://www.ird.gov.lk/en/publications/APIT_Tax_Tables/2025-2026/Guide/APIT_2526_Guideline.pdf)

Annual taxable income band (LKR)	Rate
First 1,000,000	6%
Next 500,000	18%
Next 500,000	24%
Next 500,000	30%
Balance	36%

2.2 Monthly APIT Table 01 — exact formula (Y/A 2025/2026)

Monthly APIT Table 01 — exact formula (Y/A 2025/2026) (Source (verbatim from IRD): https://www.ird.gov.lk/en/publications/APIT_Tax_Tables/2025-2026/Table%20-%201/02.%20APIT_2526_Table_01_Text.pdf)

Monthly regular profits (LKR)	Monthly APIT
Up to 150,000	Nil (relief)
150,001 – 233,333	6% × gross − 9,000
233,334 – 275,000	18% × gross − 37,000
275,001 – 316,667	24% × gross − 53,500
316,668 – 358,333	30% × gross − 72,500
Over 358,333	36% × gross − 94,000

"Monthly regular profits from employment" = gross monthly employment income, including non-cash benefits (Section 2.4). Apply the row that contains the gross figure.

Band-boundary / cumulative-tax anchors (recomputed):

• Relief LKR 150,000/month corresponds to annual relief 1,800,000. First annual band 1,000,000 ÷ 12 = 83,333.33 → gross top of 6% band = 150,000 + 83,333.33 = 233,333 ✓
• At gross 233,333: 6% × 233,333 − 9,000 = 13,999.98 − 9,000 = ≈5,000 ✓ (= 6% × 83,333 taxable)
• At gross 275,000 (top of 18% band): 18% × 275,000 − 37,000 = 49,500 − 37,000 = 12,500 ✓
• At gross 316,667 (top of 24% band): 24% × 316,667 − 53,500 = 76,000 − 53,500 = ≈22,500 ✓
• At gross 358,333 (top of 30% band): 30% × 358,333 − 72,500 = 107,500 − 72,500 = ≈35,000 ✓
• Just above 358,333 (36% band): 36% × 358,333 − 94,000 = 129,000 − 94,000 = ≈35,000 ✓ (continuous — the two formulas meet at the boundary)

Each "− subtract" constant reconciles to the lower-band cumulative tax, so the schedule is continuous at every boundary.

2.3 No tax-free relief beyond LKR 150,000/month

• Personal relief limit — The relief is LKR 150,000/month (LKR 1,800,000/year). It is built into the formula; do not subtract it a second time. Gross at or below 150,000/month attracts nil APIT under Table 01. (IRD APIT Table 01 (states "Rs. 150,000.00 per month as personal relief has already been deducted"))

2.4 Regular profits from employment include

• Regular profits from employment — Wages, salary, commission, overtime, travel and other allowances, fees, pension; non-cash benefits (housing, conveyance, electricity, telephone, entertainment, etc., at fair market value); medical bills/insurance (with a limited exemption where dental/medical/health insurance is available to all full-time employees on equal terms); third-party payments made for the employee's benefit. Only Third Schedule exemptions (Inland Revenue Act No. 24 of 2017, as amended) apply. (IRD APIT Table 01)

Section 3 — EPF (Employees' Provident Fund)

EPF is governed by the Employees' Provident Fund Act No. 15 of 1958. Contributions are computed on total monthly earnings with no floor and no ceiling. The statutory rates are minimums — an employer may contribute more.

3.1 EPF contribution rates (Y/A 2025/2026)

EPF contribution rates (Y/A 2025/2026) (Sources: EPF Act — https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/laws/acts/en/epf_act.pdf ; EPF Employer FAQ — https://epf.lk/?page_id=811 ; Central Bank EPF — https://www.cbsl.gov.lk/en/employees-provident-fund)

Party	Rate	Base
Employee	8% (deducted from pay)	Total monthly earnings
Employer	12%	Total monthly earnings
Total	20%	Total monthly earnings

Arithmetic self-check: employee 8% + employer 12% = 20% total ✓

3.2 EPF "total earnings" base

EPF total earnings base (EPF Employer FAQ)

Treatment	Items
Included	Salary/wages/fees; cost-of-living and special living allowances; holiday payments; cash value of food supplied by the employer; food allowances; commissions; piece-rate / contract payments — EPF Employer FAQ
Excluded	Overtime pay; reimbursable travelling expenses; incentive / bonus payments — EPF Employer FAQ

• EPF base ≠ APIT base — APIT (Section 2) is computed on full regular profits including overtime and many allowances; the EPF base excludes overtime, reimbursed travel and bonuses. Compute the two bases separately; never reuse the gross figure blindly. (EPF Employer FAQ)

3.3 Coverage and deadline

Coverage and deadline (EPF Employer FAQ; EPF Act)

Rule	Detail
Mandatory scope	Any employer with one or more employees — EPF applies from the first covered employee; no minimum headcount — EPF Employer FAQ
Ceiling	None — 20% applies to full total earnings — EPF Act
Floor	None identified beyond actual wage — EPF Employer FAQ
Payment deadline	On or before the last working day of the following month — EPF Employer FAQ

Section 4 — ETF (Employees' Trust Fund)

ETF is governed by the Employees' Trust Fund Act No. 46 of 1980 (fund established 1 March 1981) and administered by the ETF Board. It is employer-only.

ETF rates (ETF Act No. 46 of 1980; ETF Board payment page — https://etfb.lk/payment-of-contributions/ ; ETF Employers FAQ — https://etfb.lk/employers-faq/)

Party	Rate	Base
Employer	3%	Total monthly earnings
Employee	0% — no employee contribution; must NOT be deducted from employee pay	—

ETF mandatory scope and deadline (ETF Employers FAQ; ETF Board)

Rule	Detail
Mandatory scope	Any employer with one or more employees — ETF Employers FAQ
Payment deadline	On or before the last working day of the following month — ETF Board

• Combined employer social cost — > Combined employer social cost. Employer bears 15% of earnings (12% EPF + 3% ETF); employee bears 8% (EPF only). Total paid into the two funds = 23% (20% EPF + 3% ETF). Arithmetic self-check: 12% + 3% = 15% employer ✓; 15% employer + 8% employee = 23% total ✓.

Section 5 — Minimum Wage

Minimum wage table (Ministry of Labour — https://labourmin.gov.lk/heres-how-the-private-sector-minimum-wage-is-set-to-rise/ ; National Minimum Wage of Workers (Amendment) Act No. 11 of 2025 — https://www.parliament.lk/uploads/acts/gbills/english/6388.pdf ; Daily Mirror (gazette report) — https://www.dailymirror.lk/breaking-news/Govt-announces-Rs-27-000-minimum-monthly-wage-in-gazette-from-April-1/108-309443)

Rule	Detail
National Minimum Monthly Wage (private sector)	LKR 27,000/month (effective 1 Apr 2025; raised from LKR 21,000) — Ministry of Labour; Amendment Act No. 11 of 2025
National Minimum Daily Wage	LKR 1,080/day (raised from LKR 700) — Ministry of Labour; Amendment Act No. 11 of 2025
Budgetary Relief Allowances (BRA)	Consolidated into the LKR 27,000 figure for 2025 — no separate BRA add-on — Ministry of Labour
From 1 January 2026	Further increase to LKR 30,000/month — Ministry of Labour; Amendment Act No. 11 of 2025

• Implication for payroll — Implication for payroll: there is a binding wage floor (LKR 27,000/month for Y/A 2025/2026; LKR 30,000/month from 1 Jan 2026). Flag any monthly gross below the floor. (Ministry of Labour; Amendment Act No. 11 of 2025)

Section 6 — Conservative Defaults

When a required input is ambiguous and the user cannot supply it, apply the most conservative assumption (the one that maximises tax/contribution exposure or that forces a refusal), and label the output as provisional.

Conservative defaults table

Unknown	Conservative default	Rationale
Which APIT table applies	Use Table 01 ONLY if primary-employment / single-employer is confirmed; otherwise refuse and ask	Tables 02–08 apply to arrears, terminal payments, secondary employment, mid-year joiners — different formulas
Whether a payment is "regular profits" for APIT	Include it in the APIT gross	APIT base is broad; over-withholding is recoverable, under-withholding makes the employer personally liable (Section 124)
Whether a payment is in the EPF "total earnings" base	Include unless it is overtime, reimbursed travel or a bonus	Those three are the named exclusions; everything else is in
Whether ETF applies	Assume yes (3% employer) for any covered employee	ETF has no headcount threshold
Pay frequency	Monthly	Standard Sri Lanka practice
Currency	LKR	Only legal payroll currency
Gross below the minimum wage	Flag as below LKR 27,000/month floor (LKR 30,000 from 1 Jan 2026)	A binding floor exists
Residence / citizenship for table selection	Refuse and ask	Table 01 covers residents and Sri Lankan-citizen non-residents only

Section 7 — Required Inputs & Refusal Catalogue

7.1 Minimum required inputs

• Minimum required inputs — To compute Sri Lanka payroll for one employee for one month, you MUST have: 1. Gross monthly regular profits (in LKR) for APIT. 2. Total monthly earnings for EPF/ETF (may differ from APIT gross — exclude overtime, reimbursed travel, bonuses). 3. Employee category confirming Table 01 applies (resident or Sri Lankan-citizen non-resident; single/primary employment). 4. Month of pay (to set remittance deadlines). 5. Confirmation of whether any allowance/benefit is exempt (Third Schedule) or excluded from the EPF base.

7.2 Refusal Catalogue — REFUSE and ask if any of these hold

Refusal Catalogue

Situation	Why refuse
APIT table / employment category not stated	Tables 01–08 have different formulas; never assume Table 01 silently
Currency given is not LKR	Payroll must be in LKR; silent FX conversion introduces error
Lump-sum / arrears / terminal payment present	These use Table 02/03, not the monthly Table 01 formula
APIT gross and EPF base conflated as one number	The bases differ (overtime, travel, bonus excluded from EPF)
Employee may have a second employment	Secondary employment uses a different table
Non-resident who is not a Sri Lankan citizen	Table 01 does not apply; different withholding rules
Asked to treat the result as final/filed advice	This is a Tier 2 skill pending sign-off
Asked to confirm exact APIT penalty figures as statute	Penalty amounts are flagged — see Section 16

When refusing, state the missing input plainly and request it. Do not fabricate.

Section 8 — Transaction / Payment Pattern Library

Deterministic mapping of Sri Lankan bank-statement narrations to payroll classifications. Match case-insensitively; longer/more specific patterns win. Statements are commonly in English; banks include Bank of Ceylon (BOC), People's Bank, Commercial Bank (Combank), Hatton National Bank (HNB) and Sampath Bank. Sinhala/Tamil narrations occasionally appear.

8.1 Salary credits (employee side)

Salary credits (employee side)

Narration pattern	Classification
SALARY, SAL, PAY, NET SALARY, WAGES	Net salary credit
EMPLOYER [name] TRANSFER, STAFF SAL	Net salary credit
වැටුප (Sinhala "salary"), சம்பளம் (Tamil "salary")	Net salary credit
BONUS, INCENTIVE	Supplement — taxable for APIT, excluded from EPF base
OT, OVERTIME	Overtime — taxable for APIT, excluded from EPF base
EPF REFUND, ETF REFUND	Fund adjustment — not income

8.2 Employer debit patterns (remittances)

Employer debit patterns (remittances)

Narration pattern	Classification
IRD APIT, APIT, PAYE, IRD PAYMENT	APIT remittance to IRD
EPF, EPF CONTRIBUTION, EPF 20%, PROVIDENT FUND	EPF contribution (8% employee + 12% employer)
ETF, ETF BOARD, TRUST FUND	ETF contribution (3% employer-only)
NET WAGES, PAYROLL, SALARY BATCH, STAFF SALARIES	Net salary disbursement to employees
SLIPS, PAYMENT VOUCHER IRD	IRD payment voucher reference — tax remittance

EPF vs ETF note: an EPF remittance is 20% of the EPF base (8% deducted from staff + 12% employer); an ETF remittance is 3% employer-only. If a single line is labelled "EPF/ETF 23%", split it 20/3 before posting.

Section 9 — Worked Examples

All examples use APIT Table 01 (Section 2.2), EPF 8%/12% (Section 3.1) and ETF 3% (Section 4). For simplicity each example assumes the EPF base equals the APIT gross (i.e. no overtime/bonus); where overtime or a bonus exists, the EPF base would be lower — see the note after Example 6. Every figure recomputed end-to-end.

Example 1 — Minimum-wage earner (gross LKR 27,000/month)

Statement line: STAFF SAL EMP001 ... 24,840

• APIT: 27,000 ≤ 150,000 → LKR 0 (relief)
• EPF employee (8%): 8% × 27,000 = LKR 2,160
• EPF employer (12%): 12% × 27,000 = LKR 3,240
• ETF employer (3%): 3% × 27,000 = LKR 810
• Net pay: 27,000 − 0 − 2,160 = LKR 24,840
• Total employer cost: 27,000 + 3,240 + 810 = LKR 31,050

Cross-check vs statement: net 24,840 matches the narration ✓.

Example 2 — At the personal relief (gross LKR 150,000/month)

• APIT: 150,000 = top of the Nil band → LKR 0
• EPF employee (8%): 8% × 150,000 = LKR 12,000
• EPF employer (12%): 12% × 150,000 = LKR 18,000
• ETF employer (3%): 3% × 150,000 = LKR 4,500
• Net pay: 150,000 − 0 − 12,000 = LKR 138,000
• Total employer cost: 150,000 + 18,000 + 4,500 = LKR 172,500

Example 3 — First APIT band, 6% (gross LKR 200,000/month)

• APIT: 200,000 in band 150,001–233,333 → 6% × 200,000 − 9,000 = 12,000 − 9,000 = LKR 3,000
• EPF employee (8%): 8% × 200,000 = LKR 16,000
• EPF employer (12%): 12% × 200,000 = LKR 24,000
• ETF employer (3%): 3% × 200,000 = LKR 6,000
• Net pay: 200,000 − 3,000 − 16,000 = LKR 181,000
• Total employer cost: 200,000 + 24,000 + 6,000 = LKR 230,000

Example 4 — 24% band (gross LKR 300,000/month)

• APIT: 300,000 in band 275,001–316,667 → 24% × 300,000 − 53,500 = 72,000 − 53,500 = LKR 18,500
• EPF employee (8%): 8% × 300,000 = LKR 24,000
• EPF employer (12%): 12% × 300,000 = LKR 36,000
• ETF employer (3%): 3% × 300,000 = LKR 9,000
• Net pay: 300,000 − 18,500 − 24,000 = LKR 257,500
• Total employer cost: 300,000 + 36,000 + 9,000 = LKR 345,000

Example 5 — Top APIT band, 36% (gross LKR 500,000/month)

• APIT: 500,000 > 358,333 → 36% × 500,000 − 94,000 = 180,000 − 94,000 = LKR 86,000
• EPF employee (8%): 8% × 500,000 = LKR 40,000
• EPF employer (12%): 12% × 500,000 = LKR 60,000
• ETF employer (3%): 3% × 500,000 = LKR 15,000
• Net pay: 500,000 − 86,000 − 40,000 = LKR 374,000
• Total employer cost: 500,000 + 60,000 + 15,000 = LKR 575,000

Example 6 — 18% band (gross LKR 250,000/month)

• APIT: 250,000 in band 233,334–275,000 → 18% × 250,000 − 37,000 = 45,000 − 37,000 = LKR 8,000
• EPF employee (8%): 8% × 250,000 = LKR 20,000
• EPF employer (12%): 12% × 250,000 = LKR 30,000
• ETF employer (3%): 3% × 250,000 = LKR 7,500
• Net pay: 250,000 − 8,000 − 20,000 = LKR 222,000
• Total employer cost: 250,000 + 30,000 + 7,500 = LKR 287,500

Overtime/bonus illustration. If Example 4's LKR 300,000 comprised LKR 270,000 regular + LKR 30,000 overtime, APIT still applies to the full 300,000 (overtime is regular profits for APIT) → LKR 18,500, but the EPF/ETF base would be 270,000: EPF employee 8% × 270,000 = 21,600; EPF employer 32,400; ETF 8,100. Always split the two bases.

Section 10 — Tier 1 Rules (deterministic, always apply)

• Tier 1 Rules — 1. APIT is computed on gross monthly regular profits using Table 01 (Section 2.2) for resident / Sri Lankan-citizen-non-resident primary employment. 2. The personal relief is LKR 150,000/month, already built into the Table 01 formula — never deduct it twice. 3. EPF = 8% employee + 12% employer = 20% of total earnings (Section 3.1), no floor, no ceiling. 4. ETF = 3% employer-only of total earnings (Section 4) — never deduct ETF from the employee. 5. The EPF/ETF base excludes overtime, reimbursed travel and bonuses; the APIT base includes them. Compute the two bases separately. 6. Currency is LKR only. 7. APIT is remitted by the 15th of the following month; EPF and ETF by the last working day of the following month. 8. The minimum monthly wage is LKR 27,000 (LKR 30,000 from 1 Jan 2026) — flag any gross below it. 9. Every output is labelled provisional / pending accountant sign-off.

Section 11 — Tier 2 Catalogue (reviewer judgement required)

Tier 2 Catalogue

Item	Why it needs judgement
Selection between APIT Tables 01–08	Lump-sum (Table 02), terminal (Table 03), mid-year joiner/retiree or sub-threshold-but-annual-over-1.8M (Table 05), Table 08 categories — fact-specific
Valuation of non-cash benefits (housing, vehicle, utilities)	Fair-market-value rules under the Inland Revenue Act not fully encoded here
Whether a medical/insurance benefit qualifies for the equal-terms exemption	Conditional on all full-time staff being covered on equal terms
Third Schedule exemptions	Item-by-item statutory analysis
Residence / citizenship for table eligibility	Non-Sri-Lankan-citizen non-residents fall outside Table 01
Whether a specific allowance sits in the EPF base	The named exclusions are overtime, reimbursed travel and bonuses; edge cases need judgement
Gross-up where the employer bears the APIT	Iterative; depends on contract terms
Double-tax-treaty / expatriate relief	Treaty-by-treaty analysis
Mid-month joiners/leavers	Pro-ration and Table 05 interaction not encoded

Section 12 — Excel Working Paper Template

Suggested column layout for a monthly Sri Lanka payroll working paper (one row per employee):

Excel Working Paper Template columns

Col	Header	Formula / source
A	Employee name	input
B	TIN	input
C	APIT table (confirm 01)	input
D	APIT gross / regular profits (LKR)	input
E	EPF/ETF base — total earnings (LKR)	input (exclude OT, reimbursed travel, bonus)
F	APIT band applied	lookup on D
G	APIT (LKR)	Table 01 formula (Section 2.2)
H	EPF employee 8% (LKR)	=ROUND(E*0.08,2)
I	EPF employer 12% (LKR)	=ROUND(E*0.12,2)
J	ETF employer 3% (LKR)	=ROUND(E*0.03,2)
K	Net pay (LKR)	=D-G-H
L	Total employer cost (LKR)	=D+I+J
M	Remittance month	APIT 15th; EPF/ETF last working day

• APIT Table 01 formula (Excel) — =IF(D<=150000,0, IF(D<=233333,D0.06-9000, IF(D<=275000,D0.18-37000, IF(D<=316667,D0.24-53500, IF(D<=358333,D0.30-72500, D*0.36-94000))))) (Section 2.2)

Reconcile column G against the worked examples before relying on the sheet. Note: K subtracts APIT and EPF employee only; ETF and EPF employer are employer costs (column L), not employee deductions.

Section 13 — Bank Statement / Terminology Reading Guide (Sri Lanka)

Terminology Reading Guide

Term / abbreviation	Meaning
LKR / Rs.	Sri Lankan Rupee
IRD	Inland Revenue Department (income tax / APIT)
APIT	Advance Personal Income Tax — the PAYE-style monthly withholding
PAYE	Older name for the employee-withholding system, often used interchangeably with APIT
TIN	Taxpayer Identification Number (employer and each employee)
EPF	Employees' Provident Fund (8% employee + 12% employer = 20%)
ETF	Employees' Trust Fund (3% employer-only)
T-10 / APIT Certificate	Annual earnings/tax certificate the employer must issue to each employee
BRA	Budgetary Relief Allowance — consolidated into the 2025 minimum wage
BOC / HNB / Combank	Bank of Ceylon / Hatton National Bank / Commercial Bank
Y/A	Year of Assessment (1 April – 31 March)
වැටුප / சம்பளம்	"Salary" in Sinhala / Tamil

Section 14 — Onboarding Fallback

• Onboarding fallback questions — If you lack a required input and cannot proceed, ask the user the following, in order, and stop until answered: 1. "Does APIT Table 01 apply — is the employee a resident or Sri Lankan-citizen non-resident on a single/primary employment?" 2. "What are the employee's gross monthly regular profits in LKR (for APIT)?" 3. "What is the total-earnings base for EPF/ETF — does it differ from the APIT gross (overtime, reimbursed travel and bonuses are excluded from EPF)?" 4. "Which month is this pay run for (sets the remittance deadlines)?" 5. "Are any allowances or benefits exempt (Third Schedule) or excluded from the EPF base?" Do not estimate around a missing APIT table category or gross figure. Do not deduct ETF from the employee under any circumstance.

Section 15 — Filing Obligations & Deadlines

Filing Obligations & Deadlines (IRD APIT Annual Statement guide — https://www.ird.gov.lk/en/Downloads/Other_PAYE_Doc/Asmt_APIT_Guide_2024_2025_E.pdf ; simplebooks — https://simplebooks.com/srilanka/apit-return-filing-in-sri-lanka/ ; EPF Employer FAQ — https://epf.lk/?page_id=811 ; ETF Board — https://etfb.lk/payment-of-contributions/)

Obligation	Form / channel	Deadline
APIT monthly remittance	Pay to Commissioner-General, IRD	On or before the 15th of the following month (Section 120(a), IRA) — IRD; simplebooks
APIT Annual Statement + schedules	IRD e-filing (mandatory for all employers from Y/A 2023/2024, Section 113(1B))	On or before 30 April following the year of assessment — IRD APIT Annual Statement guide
Employee certificate (T-10 / APIT Certificate)	Employer issues to every employee, including zero-tax employees	By 30 April, or within 30 days of cessation of employment — simplebooks
EPF monthly contribution	EPF (Central Bank / Dept. of Labour)	Last working day of the following month — EPF Employer FAQ
ETF monthly contribution	ETF Board	Last working day of the following month — ETF Board

• Employer liability — Employer liability: an employer who fails to deduct/remit APIT is personally liable for the amount (Section 124(1), IRA). (Section 124(1), IRA)

Section 16 — Penalties

16.1 APIT (Inland Revenue Act)

APIT (Inland Revenue Act) penalties (LK tax-advisory summaries of the IRA)

Default	Penalty
Late / non-filing of return	LKR 50,000 fixed + LKR 10,000 per month (or part), capped at LKR 400,000 — LK tax-advisory summaries of the IRA
Late payment of tax	10% penalty if not remitted within 14 days of the due date, plus interest of 1.5% per month (or part) on unpaid tax — LK tax-advisory summaries of the IRA

[RESEARCH GAP — reviewer to confirm] The APIT penalty amounts above (LKR 50,000 + LKR 10,000/month, cap LKR 400,000; 10% + 1.5%/month) are sourced from reputable Sri Lankan tax-advisory summaries reflecting the Inland Revenue Act provisions, not a directly-extracted IRD statute page. They are consistent across multiple sources but must be cross-checked against the Inland Revenue Act No. 24 of 2017 (as amended) before publication. Sources: simplebooks — https://simplebooks.com/srilanka/apit-return-filing-in-sri-lanka/ ; bizadvisor — https://bizadvisor.lk/handbook/APIT-advance-personal-income-tax-srilanka

16.2 EPF late-payment surcharge

EPF late-payment surcharge (EPF Employer FAQ — https://epf.lk/?page_id=811)

Delay	Surcharge
1–10 days	5%
11 days – 1 month	15%
1–3 months	20%
3–6 months	30%
6–12 months	40%
Over 12 months	50%

• Incomplete details surcharge — Plus a 2% surcharge for submitting incomplete details. (EPF Employer FAQ — https://epf.lk/?page_id=811)

16.3 ETF late-payment surcharge

ETF late-payment surcharge (ETF Board — https://etfb.lk/payment-of-contributions/ ; ETF Employers FAQ — https://etfb.lk/employers-faq/)

Delay	Surcharge
≤10 days	5%
11 days – 1 month	15%
1–3 months	20%
3–6 months	30%
6–12 months	40%
Over 12 months	50%

Section 17 — Related Context (Corporate Income Tax)

Corporate income tax reference (simplebooks — https://simplebooks.com/srilanka/apit-tax/ (secondary; the primary authority is the Inland Revenue Act No. 24 of 2017, as amended).)

Item	Value
Standard corporate income tax	30% on taxable profits (most companies), Y/A 2025/2026 — secondary summary; primary is the IRA

Not part of payroll, but employers commonly ask:

Section 18 — Reference Material

Reference Material summary table (IRD APIT Table 01; IRD APIT guideline; EPF Act; EPF Employer FAQ; ETF Act; ETF Board; Ministry of Labour; Amendment Act No. 11 of 2025; IRD; simplebooks; LK tax-advisory summaries of IRA; IRD APIT Annual Statement guide)

Topic	Figure	Source
Personal relief (tax-free)	LKR 150,000/month (1,800,000/yr)	IRD APIT Table 01
APIT first band	6% (annual first 1,000,000)	IRD APIT guideline
APIT top rate	36% (annual balance)	IRD APIT guideline
APIT Table 01 6% formula	6% × gross − 9,000 (150,001–233,333)	IRD APIT Table 01
APIT Table 01 18% formula	18% × gross − 37,000 (233,334–275,000)	IRD APIT Table 01
APIT Table 01 24% formula	24% × gross − 53,500 (275,001–316,667)	IRD APIT Table 01
APIT Table 01 30% formula	30% × gross − 72,500 (316,668–358,333)	IRD APIT Table 01
APIT Table 01 36% formula	36% × gross − 94,000 (over 358,333)	IRD APIT Table 01
EPF employee	8% of total earnings	EPF Act; EPF Employer FAQ
EPF employer	12% of total earnings	EPF Act; EPF Employer FAQ
EPF total	20% of total earnings, no ceiling	EPF Act; EPF Employer FAQ
ETF	3% employer-only	ETF Act; ETF Board
Minimum wage	LKR 27,000/month; LKR 1,080/day (LKR 30,000/month from 1 Jan 2026)	Ministry of Labour; Amendment Act No. 11 of 2025
APIT remittance deadline	15th of following month (Section 120(a))	IRD; simplebooks
APIT annual statement / T-10	30 April; e-filing mandatory	IRD APIT Annual Statement guide
EPF/ETF deadline	Last working day of following month	EPF Employer FAQ; ETF Board
APIT late-filing penalty	LKR 50,000 + 10,000/month, cap 400,000 [RESEARCH GAP]	LK tax-advisory summaries of IRA
APIT late-payment	10% + 1.5%/month interest [RESEARCH GAP]	LK tax-advisory summaries of IRA
Corporate income tax	30%	simplebooks (secondary)
Year of assessment	1 Apr – 31 Mar	IRD

• Personal relief (tax-free) — LKR 150,000/month (1,800,000/yr) (IRD APIT Table 01)
• APIT first band — 6% (annual first 1,000,000) (IRD APIT guideline)
• APIT top rate — 36% (annual balance) (IRD APIT guideline)
• APIT Table 01 6% formula — 6% × gross − 9,000 (150,001–233,333) (IRD APIT Table 01)
• APIT Table 01 18% formula — 18% × gross − 37,000 (233,334–275,000) (IRD APIT Table 01)
• APIT Table 01 24% formula — 24% × gross − 53,500 (275,001–316,667) (IRD APIT Table 01)
• APIT Table 01 30% formula — 30% × gross − 72,500 (316,668–358,333) (IRD APIT Table 01)
• APIT Table 01 36% formula — 36% × gross − 94,000 (over 358,333) (IRD APIT Table 01)
• EPF employee — 8% of total earnings (EPF Act; EPF Employer FAQ)
• EPF employer — 12% of total earnings (EPF Act; EPF Employer FAQ)
• EPF total — 20% of total earnings, no ceiling (EPF Act; EPF Employer FAQ)
• ETF — 3% employer-only (ETF Act; ETF Board)
• Minimum wage — LKR 27,000/month; LKR 1,080/day (LKR 30,000/month from 1 Jan 2026) (Ministry of Labour; Amendment Act No. 11 of 2025)
• APIT remittance deadline — 15th of following month (Section 120(a)) (IRD; simplebooks)
• APIT annual statement / T-10 — 30 April; e-filing mandatory (IRD APIT Annual Statement guide)
• EPF/ETF deadline — Last working day of following month (EPF Employer FAQ; ETF Board)
• APIT late-filing penalty — LKR 50,000 + 10,000/month, cap 400,000 [RESEARCH GAP] (LK tax-advisory summaries of IRA)
• APIT late-payment — 10% + 1.5%/month interest [RESEARCH GAP] (LK tax-advisory summaries of IRA)
• Corporate income tax — 30% (simplebooks (secondary))
• Year of assessment — 1 Apr – 31 Mar (IRD)

Primary sources:

• IRD APIT Table 01 (2025/26, primary) — https://www.ird.gov.lk/en/publications/APIT_Tax_Tables/2025-2026/Table%20-%201/02.%20APIT_2526_Table_01_Text.pdf
• IRD APIT 2025/26 guideline — https://www.ird.gov.lk/en/publications/APIT_Tax_Tables/2025-2026/Guide/APIT_2526_Guideline.pdf
• IRD APIT Annual Statement guide — https://www.ird.gov.lk/en/Downloads/Other_PAYE_Doc/Asmt_APIT_Guide_2024_2025_E.pdf
• EPF Employer FAQ — https://epf.lk/?page_id=811
• Central Bank EPF — https://www.cbsl.gov.lk/en/employees-provident-fund
• EPF Act — https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/laws/acts/en/epf_act.pdf
• ETF Board contributions — https://etfb.lk/payment-of-contributions/
• ETF Employers FAQ — https://etfb.lk/employers-faq/
• Ministry of Labour minimum wage — https://labourmin.gov.lk/heres-how-the-private-sector-minimum-wage-is-set-to-rise/
• Amendment Act No. 11 of 2025 (Parliament) — https://www.parliament.lk/uploads/acts/gbills/english/6388.pdf

Section 19 — Test Suite

Each test states inputs and the expected output; recompute before trusting any change to this skill. EPF base = APIT gross unless stated; APIT from Section 2.2, EPF/ETF from Sections 3–4.

Gross 27,000 (minimum wage). Expect APIT = 0; EPF emp = 2,160; ETF emp = 0; net = 24,840; employer cost = 31,050. (See Example 1.)

Gross 150,000 (at relief). Expect APIT = 0; EPF emp = 12,000; net = 138,000; employer cost = 172,500. (See Example 2.)

Gross 200,000. Expect APIT = 6% × 200,000 − 9,000 = 3,000; EPF emp = 16,000; net = 181,000. (See Example 3.)

Gross 250,000. Expect APIT = 18% × 250,000 − 37,000 = 8,000; EPF emp = 20,000; net = 222,000. (See Example 6.)

Gross 300,000. Expect APIT = 24% × 300,000 − 53,500 = 18,500; EPF emp = 24,000; net = 257,500. (See Example 4.)

Gross 500,000. Expect APIT = 36% × 500,000 − 94,000 = 86,000; EPF emp = 40,000; net = 374,000. (See Example 5.)

EPF/ETF total check, any base B. Expect EPF employer 12% + employee 8% = 20% of B; ETF employer = 3% of B; total to funds = 23% of B; no ceiling.

ETF deducted from employee. Expect: refuse / flag — ETF is employer-only (0% employee); never deduct from pay.

Gross 300,000 with 30,000 overtime. Expect APIT on full 300,000 = 18,500; EPF base = 270,000 → EPF emp = 21,600, EPF er = 32,400, ETF = 8,100. (See note after Example 6.)

Lump-sum / terminal payment. Expect: refuse / flag — use Table 02/03, not the monthly Table 01 formula.

Gross 26,000 below minimum wage. Expect: flag as below the LKR 27,000/month floor; APIT still 0 (≤150,000).

PROHIBITIONS

• Table 01 residency/employment condition — NEVER apply Table 01 without confirming the employee is a resident or Sri Lankan-citizen non-resident on a single/primary employment — other categories use different tables. (PROHIBITIONS section)
• ETF employee deduction prohibition — NEVER deduct ETF from the employee — it is a 3% employer-only contribution. (PROHIBITIONS section)
• Double relief prohibition — NEVER subtract the LKR 150,000 personal relief a second time — it is already inside the Table 01 formula. (PROHIBITIONS section)
• APIT gross as EPF base without checks — NEVER reuse the APIT gross as the EPF base without checking for overtime, reimbursed travel and bonuses (which are excluded from EPF). (PROHIBITIONS section)
• EPF/ETF ceiling or floor prohibition — NEVER apply a ceiling or floor to EPF/ETF — the percentages apply to full total earnings. (PROHIBITIONS section)
• Currency restriction — NEVER compute payroll in any currency other than LKR. (PROHIBITIONS section)
• Penalty figures not confirmed statute — NEVER treat the APIT penalty figures as confirmed statute — they are flagged [RESEARCH GAP]. (PROHIBITIONS section)
• Deadline flagging requirement — NEVER miss the 15th-of-following-month APIT deadline or the last-working-day EPF/ETF deadline without flagging penalty exposure. (PROHIBITIONS section)
• Minimum wage ignoring prohibition — NEVER ignore the LKR 27,000/month minimum wage (LKR 30,000 from 1 Jan 2026) when a gross falls below it. (PROHIBITIONS section)
• Definitive computation prohibition — NEVER present payroll computations as definitive — always label as estimated and direct to a Sri Lanka-qualified tax practitioner. (PROHIBITIONS section)

Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a Sri Lanka-qualified tax practitioner) before implementation.

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