How does ETF work, and do employees pay for it?

ETF (Employees’ Trust Fund) is a 3% monthly contribution paid 100% by the employer on behalf of the employee. No money is ever deducted from the employee’s salary for ETF.

Which allowances count towards EPF and ETF qualifying salary?

According to the Department of Labour, earnings that count towards EPF/ETF include: Basic Salary, Cost of Living Allowance (COLA), fixed recurring allowances, and commissions on sales. Ad-hoc travel reimbursements, medical claims, and discretionary bonuses are generally exempt.

Can an employee opt out of EPF and ETF in Sri Lanka?

No. EPF and ETF contributions are mandatory statutory obligations under Sri Lanka Labour Law (EPF Act No. 15 of 1958 and ETF Act No. 46 of 1980) for all permanent, probationary, and fixed-term private sector employees.

When can an employee withdraw their EPF funds?

Employees can withdraw their full EPF accumulated balance (with annual compounded interest) upon reaching retirement age (55 years for males, 50 years for females), permanent emigration from Sri Lanka, or female employees upon marriage.

Central Bank & Labour Department Statutory Guidelines

EPF & ETF Calculator Sri Lanka 2026

Calculate your 8% Employee EPF, 12% Employer EPF, and 3% Employer ETF allocations instantly. Understand your total monthly retirement contribution and take-home impact.

Salary & Earnings Input

Instant APIT Income Tax & EPF/ETF computation (2026 IRD)

Gross Basic Salary (Monthly)LKR (Rs.)

Rs.

LKR 50,000LKR 1,500,000LKR 3,000,000

Quick Salary Benchmarks:

Deduct Employee EPF (8%)

Statutory retirement deduction from employee monthly salary.

8% EPF

Net Take-Home Pay (Monthly)

In-Hand Salary

LKR 181,000.00

Annual Take-Home Equivalent: LKR 2,172,000.00

APIT Tax

1.50% Eff.

LKR 3,000.00

Taxable: LKR 50,000.00

Employee EPF (8%)

Retirement

LKR 16,000.00

Deducted from gross pay

Employer (15%)

EPF+ETF

LKR 30,000.00

Total CTC: LKR 230,000.00

Tax Slab Breakdown (Monthly)

Official Sri Lanka IRD Tax Brackets (2026 Assessment)

Relief: LKR 150,000.00 (0% Tax)

Tax Slab	Rate	Taxable in Slab (Mo)	Tax Charged
Tax-Free Personal Relief	0%	LKR 150,000.00	LKR 0.00
First LKR 1,000,000 (6%)	6%	LKR 50,000.00	LKR 3,000.00
Next LKR 500,000 (18%)	18%	LKR 0.00	LKR 0.00
Next LKR 500,000 (24%)	24%	LKR 0.00	LKR 0.00
Next LKR 500,000 (30%)	30%	LKR 0.00	LKR 0.00
Balance above LKR 2,500,000 (36%)	36%	LKR 0.00	LKR 0.00
Total APIT Tax Payable (Monthly):			LKR 3,000.00

Disclaimer: Estimates are based on the Inland Revenue (Amendment) Act No. 2 of 2025. Consult a certified Sri Lankan Chartered Accountant or the Inland Revenue Department (IRD) for formal tax filings.

Smart Financial PlanningBased on LKR 200,000/mo

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Salary Distribution

Take-home vs Deductions

Gross PayLKR 225,000.00

Take-Home90.9%

Net Take-Home Pay90.9% of gross

LKR 204,500.00

APIT Tax Deduction2.0% of gross

LKR 4,500.00

Employee EPF (8%)7.1% of gross

LKR 16,000.00

Salary Tax Breakdowns35+ Guides

Pre-calculated salary guides with exact EPF/ETF & net pay:

LKR 50,0008% EPF: LKR 4,000.00 LKR 60,0008% EPF: LKR 4,800.00 LKR 75,0008% EPF: LKR 6,000.00 LKR 80,0008% EPF: LKR 6,400.00 LKR 90,0008% EPF: LKR 7,200.00 LKR 100,0008% EPF: LKR 8,000.00 LKR 120,0008% EPF: LKR 9,600.00 LKR 125,0008% EPF: LKR 10,000.00 LKR 140,0008% EPF: LKR 11,200.00 LKR 150,0008% EPF: LKR 12,000.00 LKR 160,0008% EPF: LKR 12,800.00 LKR 175,0008% EPF: LKR 14,000.00 LKR 180,0008% EPF: LKR 14,400.00 LKR 200,0008% EPF: LKR 16,000.00 LKR 225,0008% EPF: LKR 18,000.00 LKR 250,0008% EPF: LKR 20,000.00 LKR 275,0008% EPF: LKR 22,000.00 LKR 300,0008% EPF: LKR 24,000.00 LKR 350,0008% EPF: LKR 28,000.00 LKR 400,0008% EPF: LKR 32,000.00 LKR 450,0008% EPF: LKR 36,000.00 LKR 500,0008% EPF: LKR 40,000.00 LKR 600,0008% EPF: LKR 48,000.00 LKR 700,0008% EPF: LKR 56,000.00 LKR 750,0008% EPF: LKR 60,000.00 LKR 800,0008% EPF: LKR 64,000.00 LKR 900,0008% EPF: LKR 72,000.00 LKR 1,000,0008% EPF: LKR 80,000.00 LKR 1,250,0008% EPF: LKR 100,000.00 LKR 1,500,0008% EPF: LKR 120,000.00 LKR 1,750,0008% EPF: LKR 140,000.00 LKR 2,000,0008% EPF: LKR 160,000.00 LKR 2,500,0008% EPF: LKR 200,000.00 LKR 3,000,0008% EPF: LKR 240,000.00 LKR 5,000,0008% EPF: LKR 400,000.00

EPF & ETF Statutory Breakdown

Qualifying Salary Base: LKR 225,000.00

Total 23% Fund Pool

Employee EPF (8%)LKR 18,000.00Deducted from salary

Employer EPF (12%)LKR 27,000.00Paid by employer

Employer ETF (3%)LKR 6,750.00Paid by employer

Total Retirement Savings Deposited MonthlyAnnual Compound Base: LKR 621,000.00

LKR 51,750.00

Net Take-Home Pay (Monthly)

In-Hand Salary

LKR 204,500.00

Annualized: LKR 2,454,000.00

Take-Home Retention Rate90.89%

Total APIT Tax (Monthly)

LKR 4,500.00

Effective Rate:2.00%

Marginal Slab Rate:6%

Employee EPF (8%)

Retirement

LKR 16,000.00

Deducted from gross for EPF pension

Tax-Free Relief

2026 IRD

LKR 150,000.00

Taxable Base: LKR 75,000.00

Employer Contributions (Informational)

Total CTC: LKR 255,000.00

Employer EPF (12%)

LKR 24,000.00

Employer ETF (3%)

LKR 6,000.00

Total Employer Benefit (15%)

LKR 30,000.00

How EPF & ETF Work in Sri Lanka

Key statutory provisions and employee benefits

Employees’ Provident Fund (EPF)

Managed by the Central Bank of Sri Lanka (CBSL), EPF is the primary superannuation scheme. The employee contributes 8% of gross eligible earnings while the employer contributes 12%, yielding a combined 20% savings with guaranteed annual dividend returns.

Employees’ Trust Fund (ETF)

Administered by the ETF Board, ETF provides additional social security benefits including medical insurance, critical illness coverage, and educational scholarships for children, funded entirely by a 3% employer contribution.

Frequently Asked Questions

Sri Lanka Salary & APIT Tax Guide (2026)

Everything you need to know about IRD APIT tax rules, EPF (8%), Employer EPF (12%), and ETF (3%).

EPF (Employees’ Provident Fund) in Sri Lanka consists of two parts: (1) An 8% statutory deduction from the employee’s qualifying gross salary (Basic Salary + Fixed Allowances), and (2) A mandatory 12% contribution paid directly by the employer. Together, 20% of your earnings are deposited monthly into your Central Bank EPF account.