What date does the law specify salary must be paid in Sri Lanka?

In Sri Lanka, the law specifies that salary must be paid within 2 working days of the pay period ending.

How is salary calculated and what components does it consist of in Sri Lanka?

Gross salary in Sri Lanka consists of the following components:

• Base compensation
• Variable allowance

There are no mandatory allowances in Sri Lanka.

Is there a legal obligation to pay salaries in the same month in Sri Lanka?

Yes, there is a legal obligation to pay salaries in the same month in Sri Lanka.

Should the employment agreement in Sri Lanka specify salary in monthly or annual amounts?

Our employment agreement template for Sri Lanka specifies the salary in monthly amounts.

What tax and social security obligations do employers and employees have in Sri Lanka?

Employer and employee tax and social security obligations in Sri Lanka are deducted monthly and submitted to the tax authority as per government-listed tax rates:

• For incomes up to LKR 322,200.00: No tax is deducted.
• For incomes over LKR 322,200.00: Taxes are calculated as LKR 42,492.00 plus 36% of the amount exceeding LKR 322,200.00.

For example, for an employee with a gross salary of LKR 441,805.81:

1. Calculate the excess amount: LKR 441,805.81 - LKR 322,200.00 = LKR 119,605.81.

2. Calculate 36% of the excess: LKR 119,605.81 × 0.36 = LKR 43,058.09.

3. Add the base amount: LKR 43,058.09 + LKR 42,492.00 = LKR 85,550.10, which will be the APIT deduction.

What is the minimum wage information in Sri Lanka?

The minimum wage in Sri Lanka for the private sector is currently set at LKR 21,000.