Salary & PAYE Tax Calculator — Sri Lanka

What this calculator works out

Sri Lankan payslips involve three separate deductions, and most calculators only handle one of them. This one covers all three, so the take-home figure is the amount that actually reaches your account:

• APIT, still widely called PAYE— the income tax your employer deducts before paying you, using the Inland Revenue Department's tax tables.
• EPF — 8% of your gross salary goes into your provident fund, and your employer adds a further 12%.
• ETF — a further 3%, paid entirely by your employer. Nothing is deducted from you for ETF.

It also shows the total cost to your employer, which is useful when you are negotiating a salary or comparing an offer against a contracting rate. Whether you came looking for an APIT calculator, a PAYE calculator, a net salary calculator or simply want to know your take-home pay, this is the same calculation — the names differ, the arithmetic does not.

Tax and take-home pay at common salary levels

Monthly figures for the 2026/2027 year of assessment, for a resident employee with a single primary employment.

Take-home is gross minus APIT and minus the 8% EPF employee contribution. The effective rate is tax as a percentage of gross — always lower than your marginal band, because the early portions of your income are taxed at lower rates or not at all.

How PAYE tax is calculated in Sri Lanka

Tax is worked out on your annual income and then divided by twelve — not calculated month by month. Take someone earning LKR 300,000 a month:

1. Annualise the salary. LKR 300,000 × 12 = LKR 3,600,000 a year.
2. Deduct the personal relief. LKR 3,600,000 − LKR 1,800,000 = LKR 1,800,000 of taxable income. The relief is the reason salaries at or below LKR 150,000 a month pay no tax at all.
3. Apply each band in turn.Only the slice of income inside a band is taxed at that band's rate:
   1,000,000 at 6%60,000

   500,000 at 18%90,000

   300,000 at 24%72,000

   Annual tax222,000
4. Divide by twelve. LKR 222,000 ÷ 12 = LKR 18,500 deducted each month.
5. Subtract EPF. A further LKR 24,000 goes to your provident fund, leaving LKR 257,500 in hand.

A common worry is that a pay rise pushing you into a higher band leaves you worse off. It cannot. Only the income above each threshold is taxed at the higher rate, so earning more always means taking home more — just not all of it. In this example the marginal rate is 24%, while the effective rate across the whole salary is only 6.17%.

The 2026/2027 bands

After the LKR 1,800,000 relief, annual taxable income is taxed as follows. The same table applies to 2025/2026.

These rates took effect on 1 April 2025 under the Inland Revenue (Amendment) Act No. 2 of 2025, which raised the relief from LKR 1,200,000, widened the first band, and removed the 12% band that existed in earlier years. If a calculator still applies a 12% band, it is using an out-of-date table. The full tables, monthly and annual, are here.

PAYE, APIT, or income tax?

All three names describe the same deduction. Sri Lanka renamed PAYE (Pay As You Earn) to APIT (Advance Personal Income Tax) in 2020, but the older name stuck — employers, payroll teams and payslips still say PAYE, while the Inland Revenue Department's own tables are titled APIT. It is called advance tax because your employer pays it over on your behalf during the year, rather than you settling it afterwards. Nothing about the calculation differs, so whichever term your payslip uses, the figures on this page apply.

EPF and ETF, and why they are not the same thing

The Employees' Provident Fund is a retirement fund you and your employer both pay into. 8% comes out of your salary and 12% is added by your employer, so 20% of your gross goes into your fund each month while only 8% of it leaves your pay packet.

The Employees' Trust Fund is separate and is funded entirely by your employer at 3%. Nothing is deducted from you for ETF, which is the single most common mistake in salary calculations — subtracting the employer's 12% and 3% understates take-home pay by 15% of gross.

Both are calculated on gross earnings rather than on taxable income, and neither is reduced by the personal relief. Your EPF contribution also does not lower your taxable income — tax and provident fund are worked out independently of one another.

What this calculator does not cover

It uses Tax Table No. 01, which applies to a resident employee with a single primary employment. That covers most people on a normal monthly salary, but not these:

• Secondary employment. A second job is deducted under a different table, and adding two salaries together here will not give the right answer.
• Lump sums and terminal benefits. Bonuses paid as a one-off, gratuity and retirement benefits have their own tables and reliefs.
• Non-cash benefits. A company vehicle, housing or similar are valued under specific rules and added to taxable income.
• Directors' fees, non-residents, and foreign income. Each is treated separately.
• Freelance and business income. APIT applies to employment income. Self-employed income is assessed differently and is usually paid in instalments rather than deducted at source.

If any of those apply to you, treat the figure here as a rough starting point and check with your payroll team or the Inland Revenue Department.