DoubleTaxationTaxes on salary: Sri Lanka preliminary data
How much income tax and social contributions are paid on a salary in Sri Lanka, what a sole proprietor and a company pay, and which special regimes exist. Preliminary data.
Preliminary data: headline rates from official sources and bulletins of international organisations, without reliefs or special rules; being refined.
Calculation for a gross salary of €60,000 per year
| Gross salary | LKR 21,768,462 ≈ €60,000 |
|---|---|
| Income tax | LKR 6,708,646 ≈ €18,491 |
| Employee contributions | LKR 1,741,477 ≈ €4,800 |
| Take-home pay | LKR 13,318,339 ≈ €36,709 |
| Employer contributions and payroll taxes | LKR 3,265,269 ≈ €9,000 |
| Employer's labour cost | LKR 25,033,731 ≈ €69,000 |
Only some of the country's direct taxes and levies are counted: income tax on wages and compulsory contributions. Not counted: property and real-estate taxes; taxes on dividends, interest and other investment income; inheritance and gift taxes; indirect taxes such as VAT, excise and customs duties.
Taxes for sole proprietors and companies
Tax and contributions on the profit for a year; expenses are 10% of revenue, the company pays its profit out to the owner. Reliefs and local taxes are not included.
| Annual revenue | €30,000 LKR 10,884,231 | €60,000 LKR 21,768,462 | €120,000 LKR 43,536,924 |
|---|---|---|---|
| Sole proprietor | LKR 2,398,491 24.5 % | LKR 5,924,982 30.2 % | LKR 12,977,963 33.1 % |
| Company | LKR 3,967,302 40.5 % | LKR 7,934,604 40.5 % | LKR 15,869,209 40.5 % |
Special tax regimes
Maximum 15% rate on foreign-currency service income and foreign-source income remitted to Sri Lanka
For the self-employed · rate 15.0 %
Who: Resident individuals (and companies) exporting services or earning foreign-source income in foreign currency.
Gains from services used outside Sri Lanka and paid in foreign currency, and foreign-source income in foreign currency, are taxed at no more than 15% when remitted through a bank.
Legal basis: Inland Revenue Act No. 24 of 2017 as amended by Act No. 02 of 2025 (rate schedule, from 1 April 2025)
Tax residence
The tax residence check does not cover Sri Lanka yet.
Assumptions
- Calculated with the OECD Taxing Wages methodology: income tax including local taxes plus employee social security; single person without children, tax year 2026, ECB rate of 2 January 2026.
- Exchange rate: 1 EUR = 362.8077 LKR (Central Bank of Sri Lanka — indicative exchange rate, 2 Jan 2026, 2026-01-02) ↗
Sources
- Inland Revenue Department — Tax Chart, year of assessment 2025/2026
- Inland Revenue Department — Income Tax (personal relief history)
- Employees' Provident Fund — Remitting contributions (8% employee / 12% employer)
- Employees' Trust Fund Board — Employer details (employer contribution 3% of total monthly earnings)
- Central Bank of Sri Lanka — daily indicative exchange rates (USD, 30 Dec 2025 - 6 Jan 2026)
Data checked: 2026-11-08. An indicative calculation for a typical case. Not tax advice.