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Sri Lanka

Basic Economic Summary

The island country Sri Lanka is a scenic beauty with numerous natural resources across its length and breadth. The country is well-known as a tourism destination and exotic delicacies. With so much to offer to the world, Sri Lanka is slowly establishing itself as a stable economy with numerous reforms.

The country houses many technology-based professionals and MNCs hire aggressively owing to the cost-effectiveness and high-valued experts available. Sri Lanka’s highly skilled workforce is bound to reach new heights with job opportunities developing slowly and steadily.

Basic Information

  • Local Languages: Sinhala (Official), Tamil (Official), English
  • Major Economic Hubs: Sri Jayawardenepura Kotte, Colombo, Kandy, Galle
  • Capital: Colombo
  • Currency: Sri Lankan Rupee (LKR)
  • Population: 21.54 million (2021)
  • Date Format: dd/mm/yyyy

Useful Information

  • GDP Per Capita (in USD. 2020): 4,052.75
  • Exchange Rate (LKR/USD): 0.0049
  • PISA Ranking (2018): Not ranked

Local Universities

Top Local Universities:

University Rankings
University of Colombo Ranking in Sri Lanka: 1, World Ranking: 1403
University of Sri Jayewardenepura Ranking in Sri Lanka: 2, World Ranking: 2218
University of Moratuwa Ranking in Sri Lanka: 3, World Ranking: 2362
University of Peradeniya Ranking in Sri Lanka: 4, World Ranking: 2555
University of Kelaniya Ranking in Sri Lanka: 5, World Ranking: 3021

Salary Data

Average Salary of Jobs (Per Month)

Job Title Average Salary Range (LKR) Average Salary Range (USD)
Accounting Manager 69,500 - 204,000 343 - 1,006.78
Software Developer 46,400 - 137,000 229 - 676.12
Data Analyst 40,500 - 129,000 199.88 - 636.64
UX Designer 40,500 - 119,000 199.88 - 587.29
Product Manager 65,200 - 208,000 321.78 - 1026.52
Sales Manager 87,600 - 258,000 432.32 - 1273.28

Talent Sourcing Tips

Taxes

Employer Payroll Tax

Type of TaxContribution (%)
Employees Provident Fund (EPF)12%
Employers Trust Fund3%

Link to Employer Payroll Tax.

Employers are required to pay a half-month’s salary for each year of completion if the employee’s service period exceeds five years at the time of retirement, resignation, or retrenchment.

Employee Payroll Tax

Type of TaxContribution (%)
Employees Provident Fund (EPF)8%

Link to Employee Payroll Tax.

Employee Monthly Income Tax

Income Group (LKR)Contribution (%)
0 – 250,0000%
250,000 – 500,0006%
500,000 – 750,00012%
> 750,00018%

Sri Lanka follows a progressive income tax model. Link to Employee Income Tax.

Minimum Wage & Payroll

Minimum Wage

The statutory minimum wage is LKR 10,000 a month or LKR 400 a day.

Payroll Cycle

Wages can be paid on daily, weekly, fortnightly or monthly basis. However, a wage period cannot exceed a month.

Bonus

13th month salary

Not mandatory for private enterprises.

Working Hours & Statutory Leave

Maximum working hours

The daily working hours cannot exceed 9 hours if the meal or rest time do not exceed one hour.

If the rest time exceeds one hour, the working hours must be less than 9 hours + additional rest time given.

Weekly working hours cannot exceed 45 hours per week.

Overtime pay

The maximum overtime hour is 12 hours per week, and overtime is paid at 150% of the employee’s hourly pay.

Public Holidays

The public holidays can be found here.

Annual Leave

Employees are entitled 14 days of annual vacation after their first full year of employment.

Sick Leave

Employees are entitled to 7 days of paid casual leave in any year, except during the first calendar year of employment

Parental Leave

Maternity Leave

12 weeks paid maternity leave where 2 weeks is before confinement and 10 weeks after the day of confinement.

In the case of the birth of a non-live child, the paid maternity leave is 6 weeks, where 2 weeks is before the confinement and 4 weeks after the day of confinement.

Offboarding & Termination

Termination Process

The termination process is moderately simple.

Either the prior written consent of the employee or the prior written approval of the Commissioner of Labor is required to terminate the services of an employee.

In the case of closure of establishment or removal of employees due to winding up of sections or retrenchment, employers should apply for the approval of the Labor Commissioner.

Notice Period

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.

Severance Pay

Years of EmploymentSeverance Pay (Per Year of Employment)
1 – 52.5-month pay per year
6 – 142-month pay per year
15 – 191.5-month pay per year
20 – 241-month pay per year
25 – 340.5-month pay per year

Probation period

Not mandatory. Probation is capped at 1 year for supervisory or technical job roles, while probation is capped at 6 months for any other employee.

VAT

Sri Lanka levies a standard VAT of 15%.

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