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Remote work and foreign employer tax calculator

If you live in Sri Lanka and work as an employee of a company abroad, your employer cannot deduct Sri Lankan tax, so you pay it yourself every month under APIT Table 08. The rate never goes above 15%.

For 2025/2026 and 2026/2027, from the Inland Revenue Department's Table 08 instructions, and checked against the IRD's own example. Nothing you type leaves your browser.

By Last reviewed against IRD publications on

Table 08 applies only if all three are true

  1. Your employer is completely outside Sri Lanka, with no permanent establishment here.
  2. Your work is used by the employer outside Sri Lanka.
  3. You are paid in foreign currency, remitted through a bank to Sri Lanka.

Freelancers and independent contractors are not covered: the IRD treats their income as business income. It is still taxed at no more than 15%, through quarterly instalments and the annual return.

Pay from your foreign employer

Year of assessment
How you are paid
USD
LKR

The IRD's example converts each remittance at the Central Bank buying rate. To use a different rate each month, switch to entering each month in rupees.

USD

An estimate, not tax advice. Assumes your only employment income for the year is from the foreign employer. If you also have a Sri Lankan salary, see the questions below.

How Table 08 works

Tax is worked out on your cumulative employment income from 1 April, converted into rupees, and each month you pay the increase. The IRD states the table as:

Cumulative employment income (LKR)Tax on the total
Up to 1,800,000Relief from tax
1,800,000 to 2,800,0006% of the total less 108,000
Above 2,800,00015% of the total less 360,000

Put simply: the first LKR 1,800,000 of the year is tax-free, the next LKR 1,000,000 is taxed at 6%, and everything above that at 15%. A local salary of the same size would reach 36%. Each month's tax is due within fifteen days after the end of the month in which you were paid.

Worked example from the IRD

Table 08's own example: a software developer working remotely for a UK company, paid USD 6,000 a month with a USD 10,000 bonus in October, for 2025/26. Each remittance is converted at the Central Bank buying rate. This calculator's schedule matches the IRD's to the rupee.

IRD Table 08 example, year of assessment 2025/26
MonthReceivedCumulativeTax to datePayable
April 20251,794,0001,794,0000Nil
May 20251,806,0003,600,000180,000180,000
June 20251,728,0005,328,000439,200259,200
July 20251,710,0007,038,000695,700256,500
August 20251,776,0008,814,000962,100266,400
September 20251,800,00010,614,0001,232,100270,000
October 20254,752,00015,366,0001,944,900712,800
November 20251,728,00017,094,0002,204,100259,200
December 20251,716,00018,810,0002,461,500257,400
January 20261,614,00020,424,0002,703,600242,100
February 20261,740,00022,164,0002,964,600261,000
March 20261,752,00023,916,0003,227,400262,800

Total for the year: LKR 3,227,400 on LKR 23,916,000, an effective rate of 13.5%. October's payment is larger because the bonus was paid that month.

Sources

Every rate and rule on this page comes from the documents below, checked on 25 October 2026. Where they and this page differ, they are right.

Questions about tax on a foreign salary

Who does APIT Table 08 apply to?
Residents who are physically in Sri Lanka and work remotely as employees of a foreign employer. All three of the IRD's conditions must hold: the employer is completely outside Sri Lanka with no permanent establishment here, your services are used outside Sri Lanka, and you are paid in foreign currency remitted through a bank to Sri Lanka.
How do I pay tax on a salary from a foreign employer?
Yourself, every month. Because the employer is outside Sri Lanka it cannot deduct APIT, so Table 08 makes you responsible for paying it within fifteen days after the end of the month in which you were paid. Payments go to your own Taxpayer Identification Number (TIN) with the tax type Individual Income Tax (IIT).
Why is tax on a foreign salary capped at 15%?
The 2025/26 Tax Chart says income from services used outside Sri Lanka, and foreign-source income, received in foreign currency and remitted through a bank, “shall be taxed at the maximum rate of 15%”. Table 08 applies that: no tax up to the LKR 1,800,000 relief, 6% on the next LKR 1,000,000, and 15% on everything above it.
Which exchange rate should I use for Table 08?
The IRD's worked example in Table 08 converts each month's remittance at the Central Bank of Sri Lanka buying rate. This calculator lets you enter the rupee amount for each month separately, so you can use the rate for each remittance rather than one rate for the year.
Does Table 08 apply to freelancers?
No. Table 08 says it does not apply to independent service providers and freelancers, because their income is business income. Business income from services used outside Sri Lanka and paid in foreign currency through a bank is still taxed at a maximum of 15% under the Tax Chart, but it is paid through quarterly instalments and the annual return.
What if I have a Sri Lankan salary as well as a foreign one?
Table 08 does not deal with the combination. In the annual return, local income uses the personal relief and the lower bands first, and the foreign income is taxed on top of it at a maximum of 15% (Example 02 in the 2025/26 return guide). Monthly Table 08 payments worked out on the foreign salary alone may therefore fall short. The income tax return calculator shows the combined position.