Sri Lanka

Sri lanka
Currency
LKR
Payroll Frequency
Weekly, Bi-Weekly, or Semi-Monthly
Employer Taxes
Provident Fund (EPF): 12%
Employee Trust Fund: 3%
VAT 8%

Overview

Capital
Sri Jayawardenepura Kotte
Currency
Sri Lanka Rupee (LKR)
Date format
dd/mm/yyyy

Contributions

Employer
Employee

Sri Lanka Social Security Rate
In Sri Lanka, the Social Security Rate is a tax related with labor income charged to both companies and employees. Revenues from the Social Security Rate are an important source of income for the government of Sri Lanka because they help to pay for many social programs including welfare, health care and many other benefits.

The Social Security Rate For Employees in Sri Lanka stands at 8%
The Social Security Rate For Employees in Sri Lanka stands at 12%

Income Taxes

Minimum Wage

General

Sri Lanka’s minimum wage rate is 10,000 rupees per month.

Payroll

Payroll Cycle

Entitlements in Sri Lanka
Minimum Wage: Minimum monthly wage for all employees (irrespective of industry) is LKR 10,000, and the minimum daily wage is LKR 400.

Working Hours: Total hours worked, exclusive of meals and rest, don’t exceed 9 hours a day, or 45 hours in any week. Working hours of a person above the minimum age of employment (14 years) but less than 16 years shall not exceed 12 hours a day – and not before 6 am and after 6 pm.

Payroll Cycle: The wages are paid on a daily, weekly, fortnightly, or monthly basis. However, a wage period cannot exceed a month.

Pay Date: It has to be made on a working day.

Overtime Compensation: Overtime is paid at one and half times the average hourly rate of wage. The overtime hours in a week cannot exceed 12 hours

Employee Statutory Benefits
Employment Insurance System: Employees are given employment insurance cover. However, the kind of cover depends on the employer.

Employee Voluntary Benefits
Bonus: There is no obligation imposed by law on employers to pay bonuses. In general, unless mentioned in the employment contract, bonus payments are entirely at the employer’s discretion and largely depend on the employer’s financial performance

13th Salary

Working Hours

General

A normal working week cannot exceed 48 hours

Working hours on any one day shall not exceed 8 hours, and
In any one week shall not exceed 45 hours.
This rule is not applicable to any person who holds an executive or managerial position in a public institution.
Factories Ordinance Section 67 – the work of women and young persons:

The total hours worked, exclusive of intervals for meals and rest, shall not exceed 9 hours in any day nor exceed 48 hours in any week
The working of hours of a person above the minimum age for employment (14 years) but less than 16 years shall not exceed 12 hours per day – not before 6 a.m. and not after 6 p.m.
The working hours of those below 18 years, cannot go beyond 8 p.m. and not beyond 1 p.m. on one day of the week.
Both women and young persons cannot be employed continuously for a spell of more than four and a half hours without an interval of at least half an hour.
What are the rules for night work for women?

As per the Factories Ordinance, while women can be employed in a factory and permitted to work throughout the night:

  • No woman shall be forced to work at night against her will
  • The Commissioner of Labour must sanction the factory to employ women after 10 p.m. at night
  • Women have worked from 6 a.m. to 6 p.m. cannot be employed after 10 p.m. on any day
  • Night work by women shall be paid at a rate not less than one and half times the normal payment
  • Female wardens must be present in the factory to oversee the welfare of women workers.
  • Women workers must be provided with restrooms and refreshments by the employer.
  • A woman cannot be employed for more than 10 days of night work during any one month.
Overtime

All work over and beyond that period is considered overtime.
A maximum of 12 hours of overtime per week is permitted.
According to Section 24 (d) the payment for work on holidays should not be less than the overtime rate
If no overtime rate has been determined, then payment must be calculated at one-and-a quarter times the rate normally applicable to such work
A holiday must be given with or without remuneration on a day within a specified number of days
In the case of any special class of workers, the payment should not be less than one and a half times the rate normal to such work, without the grant of a substitute holiday.
The Shop and Office Employees Act

Women and young persons over the age of 16 years may be employed for overtime, provided that this does not exceed a total of 100 hours annually or 6 hours in a week and no more than 25 weeks in a year.

Leave & Public Holidays

Paid Time Off
Casual Leave Annual Leave Maternity Leave Poya Holidays
Half day per month or One day every two months in the first year of employement. No entitlement in the first year of service 84 working days for the first and second child births Each full moon Poya day is considered a holiday
7 days from the second year of employment. The leave earned according to the period of service can be obtained (maximum – 14) 42 days for the third and succeding child births
In the succeeding years earned leave of 14 days
Public Holidays

8 Public holidays per year:

  1. National day
  2. Thaipongal day
  3. The day previous to the Sinhala Tamil new year
  4. The Sinhala Tamir new year day
  5. May day
  6. The day following Vesak Poya day
  7. Holy Prophet’s Mohammed’s Birthday
  8. Christmas Day
Sick Days

Seven days for each year of employment.

Maternity / Paternity Leave

Maternity Leave

Provides women workers with maternity benefits of up to twelve weeks of paid leave. Requires employers of more than a specified number of women workers to provide child care facilities for children under five years old and authorizes the promulgation of regulations regarding those facilities.

Paternity Leave

There is no provision for paternity leave in the labour & employment laws of Sri Lanka

Parental Leave
Other Leave

Termination

Termination Process
Notice Period

The law requires termination notice before terminating services of an employee. However, the law does not deal with individual dismissals rather it talks only about retrenchment (collective dismissals). Workers may be retrenched only after giving at least one month’s notice. A worker is eligible for this one month notice only after one year of service. A worker with less than one year of service is not entitled to any notice.

Severance Pay

Workers who have completed five years of service with an employer employing fifteen or more workmen, are entitled to gratuity at following rates in the event of termination (whether by the employer or workman, or on retirement or by the death of the workman, or by operation of law, or otherwise) of the services:

1. Half a month’s wages or salary for each completed year of service for monthly rated workmen; and

2. 14 days salary for each year of completed service for other workmen.

This amount is payable in every circumstances whatever the reason for termination may be, (resignation, dismissal, retirement, death of the worker, by operation of law, or otherwise), and may only be withheld in certain narrowly defined instances.

Under the Termination of Employment of Workmen (Special Provisions) Act 1975, there is provision for redundancy payment. The compensation in lieu of reinstatement is only payable in the event of termination by the employer resulting from the closure of any business which is in violation of the Act in accordance with the following compensation formula:

2.5-month pay per year of service for 1st to 5th year of service (maximum compensation: 12.5 months);
2-month pay per year of service for 6th to 14th year of service (maximum compensation: 30.5 months);
1.5-month pay per year of service for 15th to 19th year of service (maximum compensation: 38 months);
1-month pay per year of service for 20th to 24th year of service (maximum compensation: 40 months); and
0.5-month pay per year of service for 25th-34th year of service (maximum compensation: 48 months)
Source: §5 & 6 of Payment of Gratuity Act; Termination of Employment of Workmen (Special Provisions) Act 1975

Probation Period

VISA

General

To obtain a Residence visa to work in Sri Lanka, the applicant must obtain an Entry visa issued by a Sri Lanka Diplomatic Mission abroad which is valid only for 30 days.

Therefore, Applicant should obtain prior approval from the Department of Immigration & Emigration in Sri Lanka before applying for Entry Visa.

Visa Application Requirements
Duly completed Visa application FORM “B” (Can obtain from Embassy upon request)
Passport with two unused pages (validity should be at least six months from the date you arrive in Sri Lanka)
Copy of Passport (Data page/Photo page)
Copy of the approval of the Controller of Immigration & Emigration for a Entry Visa
Two recent photographs -passport size- taken within last 6 months
Relevant visa fee (Embassy accept only CASH Payments).
Your Travel Itinerary

VAT

General

12%

Date of Updates
21/07/2022

Why AYP

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