Overview
Payroll Cycle
Employer Contributions
Employee Contributions
Minimum Wage
Hiring
Hiring Employees
Hiring Contractors
Hiring Expats
Background Checks
Employment Contracts
Onboarding
Employee Benefits
Social Security
Healthcare and Insurance
Leave Policy
Public Holidays
Work Permit and Work Visa
Probation Period
Notice Period
Termination and Severance
Personal Income Tax
Discover our EOR (Employer of Record) services in Sri Lanka, designed to help international employers effectively manage their employment records within the country. Gain valuable insights into hiring practices, discrimination regulations, employment applications, and the use of employment contracts in Sri Lanka. Our comprehensive resources provide the necessary information to navigate these aspects and ensure compliance with local laws. Whether you are recruiting permanent, fixed-term, seasonal, or casual employees, our EOR services offer the support you need for a smooth and successful employment experience in Sri Lanka.
| Overview | |
| Continent | Asia |
| Country | Sri Lanka |
| Capital | Colombo |
| Time zone | UTC+05:30 (SLST) |
| Total Time zones | 1 |
| Working hours per week | 40 |
| Working week | Monday–Friday |
| Typical hours worked | 8 |
| Personal Tax filing deadline | 30 November immediately following the end of that year of assessment. |
| Financial Year | 1st April to 31st March |
| Date format | dd/mm/yyyy |
| Currency | Sri Lankan Rupee (LKR) |
| VAT | the standard rate is 8% |
Employer Payroll Contributions in Sri Lanka
| Employers | % of Gross Salary |
| Provident Fund (EPF) | 12% |
| Employee Trust Fund | 3% |
| Total Employment Cost | 15% |
Employee Payroll Contributions in Sri Lanka
| Employees | % of Gross Salary |
| Provident Fund (EPF) | 8% |
| Total Employee Cost | 8% |
Minimum Wages in Sri Lanka
| Minimum Wage | |
| Minimum Wage | 10000 LKR per month. |
Payroll Cycle in Sri Lanka
| Payroll | |
| Payroll Cycle | Monthly |
| 13th Salary | A 13th-month salary is not mandatory. |
Personal Income Tax in Sri Lanka
| Income Tax - year of assessment 2023 - 2024 | |
| Taxable Income | Tax Rate |
| First Rs. 500,000 | 6% |
| Next Rs.500,000 | 12% |
| Next Rs.500,000 | 18% |
| Next Rs.500,000 | 24% |
| Next Rs.500,000 | 30% |
| Balance | 36% |
Hiring in Sri Lanka
Hiring Options
In Sri Lanka, employers have flexibility in hiring employees based on their requirements and business needs. There are no specific statutory provisions regulating the hiring process, and employers are not obligated to provide reasons for not hiring an individual.
Employment options in Sri Lanka include:
- Permanent employment contracts
- Fixed-term employment contracts
- Seasonal employment contracts
- Casual employment arrangements
It is also possible to enter into a contract for services rather than a contract of employment. The distinction between an employee and an independent contractor depends on factors such as the level of control exerted by the employer and the person's integration into the organization. The substance of the relationship takes precedence over the contract's form.
Termination of a contract for services is governed by the provisions of the contract itself, and disputes related to such contracts are not within the jurisdiction of a Labor Tribunal. In cases where an employment relationship is established, termination may require permission from the Commissioner of Labor in certain situations. Employees whose employment is terminated can seek relief from a Labor Tribunal if they believe the termination was unjustified.
Discrimination
While there is no explicit statutory prohibition against discrimination in the hiring process in Sri Lanka, the Constitution guarantees the right to equality. Article 12 of the Constitution states that no citizen shall be discriminated against based on race, religion, language, caste, sex, political opinion, or place of birth. However, it allows for language requirements if reasonably necessary for specific employment or office roles.
Private individuals' actions may be subject to the ordinary law of the land rather than the Constitution's fundamental rights jurisdiction, except for discrimination based on the grounds specified in Article 12(3). Discrimination claims are unlikely to be viable for individuals who were not hired due to limited legal protection at the hiring stage.
However, once employed, discriminatory conduct may be disapproved by a Labor Tribunal or other entities involved in resolving industrial disputes, even in the absence of explicit statutory protection against most forms of discrimination.
Employment Applications
Sri Lankan law does not provide specific regulations governing employment applications or specifying permissible inquiries. Typically, an employment application in Sri Lanka includes a curriculum vitae (CV) that provides general information about the applicant, educational qualifications, skills, work experience, and the names of referees.
Use of Employment Contracts
Under the Shop and Office (Remuneration of Employees) Act No. 15 of 1954, employers are required to provide employees with written particulars of their employment conditions. These particulars include the employee's name, designation, appointment details, remuneration, probationary period (if any), termination conditions, normal working hours, holidays, overtime rates, medical aid provisions, and information on provident funds, pension schemes, and promotion prospects.
While there is no general legal requirement for written contracts of employment, having a written contract makes it easier to determine the terms and conditions of employment. In the absence of a written contract, the terms and conditions may be ascertained from the oral agreement, common law, applicable statutory provisions, workplace customs, usage and practices, collective agreements, or decisions of Labor Tribunals.
Arbitration clauses are not typically included in employment contracts since industrial disputes are governed by the Industrial Disputes Act, and industrial arbitration falls outside the scope of the Arbitration Act No. 11 of 1995. Employees can seek resolution through the Commissioner in case of industrial disputes, and the award from arbitration proceedings takes precedence. Agreements cannot legally exclude the jurisdiction of a Labor Tribunal or an arbitrator appointed under the Industrial Disputes Act.
Non-disclosure agreements concerning confidential information are valid, and unauthorized disclosure of such information can lead to civil action and may be punishable under the Intellectual Property Act No. 36 of 2003.