How Income Tax Works in Sri Lanka
Sri Lanka withholds APIT (Advance Personal Income Tax) monthly. The system is generous at the bottom: a LKR 1,800,000/year personal relief (LKR 150,000/month) is completely tax-free, then rates run 6% to 36%. The tax year runs 1 April – 31 March.
The APIT rates (annual taxable after relief)
| Taxable income (LKR) | Rate |
|---|---|
| First 1,000,000 | 6% |
| Next 500,000 | 18% |
| Next 500,000 | 24% |
| Next 500,000 | 30% |
| Above 2,500,000 | 36% |
EPF — the 8%
Employees contribute 8% of total monthly earnings (basic + fixed allowances, excluding overtime) to the Employees' Provident Fund. In monthly withholding, EPF is not subtracted before APIT.
Worked example
Monthly salary of Rs 300,000: annualized = 3.6M; taxable = 3.6M − 1.8M = 1.8M. APIT = 60,000 + 18% × 800,000 = Rs 204,000/year (≈Rs 17,000/mo). EPF = 24,000. Take-home ≈ Rs 259,000/month.
Try it: Sri Lanka salary calculator →
Sources: Inland Revenue Department (ird.gov.lk). Estimate only — not tax advice.