* Playroll continues to analyse immediate opportunities and fulfilled roles by recruitment partners, contractors and employers to identify in-demand jobs.

Capital City
Colombo & Sri Jayawardenepura Kotte

Sri Lankan Rupee (Rs)


IST (GMT +5:30)

Weekly / Semi-monthly / Monthly
Employment Cost


Annual Leave

14 days

In-demand Specialties*
Agriculture, Garment Production, Tourism

The Ultimate Guide to Hiring Employees in Sri Lanka

Simplify hiring employees in by partnering with Playroll. Our Employer of Record (EOR) handles hiring, onboarding, payroll, taxes, immigration, benefits administration, and compliance. While you maintain control of day-to-day tasks and responsibilities.

hiring-in-Sri Lanka-guide

Key Considerations Before Hiring In Sri Lanka

Employing in Sri Lanka requires employers to own a legal entity in the country and manage payroll, tax, benefits and compliance through their own in-country resources. Grow your team in Sri Lanka with our Employer of Record solution, ensuring streamlined, compliant business expansion with no entity.

Playroll allows you to hire employee's in Sri Lanka quickly, easily and we even automate tax document collection, benefits, payroll and more.

Good To Know

Positioned near burgeoning markets and boasting a skilled workforce, Sri Lanka offers numerous benefits and incentives for global investors. It has outpaced many South Asian counterparts in financial, human, and social development.

Over the past decade, Sri Lanka's economy has exhibited consistent growth, transitioning from a middle-income economy to a nation with an average economic growth exceeding 5%. The country is actively shifting from a predominantly rural economy to an urbanised one centred on manufacturing and services.

Despite the inherent investment risks in any location, Sri Lanka stands out as one of the leading economies in South Asia.

Tailored investment and export development policies align with national development goals, establishing Sri Lanka as an attractive destination for international buyers and investors.


Fundamental Aspects of Employment in Sri Lanka

In Sri Lanka, employment contracts can be either verbal or in writing. However, opting for written contracts, duly signed by both the employee and employer, offers greater clarity and evidentiary value. These contracts must encompass key terms, including but not limited to:

  • Basic salary
  • Working Hours
  • Leave entitlements
  • Job duties and responsibilities

Probationary Period in Sri Lanka

Sri Lanka's labour laws do not explicitly specify the duration of probationary periods. However, it is customary for the probationary period to be around 6 months. For senior employees, the probation period cannot exceed a year, and for other employees, it is limited to 6 months. In specific instances, the maximum probation period is capped at 3 months.

Working hours in Sri Lanka

In Sri Lanka, the standard work week consists of 8 hours per day, totaling 45 hours per week. However, industry-specific regulations, such as the Factories Ordinance, impose restrictions on certain employees, prohibiting them from working on specific days.

Overtime in Sri Lanka

Overtime in Sri Lanka is compensated at 150.00% of the regular pay rate, and the maximum allowable overtime hours are 12 per week. Certain exemptions from these restrictions may apply to executive or professional positions.

Navigating Key Aspects of Payroll in Sri Lanka

Sri Lanka has a robust and complex payroll and tax system, and as an employer, it pays to understand payroll process basics.

1 January - 31 December

Fiscal Year in Sri Lanka

1 January - 31 December is the 12-month accounting period that businesses in Sri Lanka use for financial and tax reporting purposes.
weekly / semi-monthly / monthly

Payroll Cycle in Sri Lanka

The payroll cycle in Sri Lanka is usually weekly / semi-monthly / monthly, with employees being paid as specified in employment contracts.
69.44 LKR p/h

Minimum Wage in Sri Lanka

The minimum wage for employees in Sri Lanka is typically 69.44 LKR per hour, amounting to ~12,500 LKR per month for a typical 45 hour work week.

Minimum wages and salaries in Sri Lanka

The minimum wage in Sri Lanka is 12,500 LKR per month, equivalent to 500 LKR per day.

Bonus Payments in Sri Lanka

There is no legal obligation to provide a 13th-month salary in Sri Lanka.

Comprehensive Overview of Employment Taxes in Sri Lanka

Understanding the tax obligations for both employers and employees is crucial when operating in Sri Lanka's business landscape. This section explains how taxes and statutory fees affect payroll and individual earnings in Sri Lanka.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 30% on top of the employee salary in Sri Lanka.

Tax Rate Tax Type

Employee Payroll Tax Contributions

In Sri Lanka, the typical estimation for employee payroll contributions cost is around 8%.

Tax Rate Tax Type

Individual Payroll Tax Contributions

Income tax in Sri Lanka is determined based on progressive rates, with various additional factors influencing the overall rates, including household status and the number of children.

Tax Rate Income Bracket

Pension in Sri Lanka

As per the Minimum Retirement Age of Workers Act in Sri Lanka, the retirement age is set at 60 years. The old-age pension is managed through a Provident Fund and Trust Fund system. The employer contributes 12% of the monthly payroll to the Provident Fund and 3% of the monthly payroll to the Trust Fund.

The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Sri Lanka tailored to your needs.

Easily navigate payroll, taxes and contributions with Playroll.

Grow your distributed workforce today!

Understanding the Protocols for Termination of Employment in Sri Lanka

When it comes to terminating employment in Sri Lanka, understanding the legal obligations regarding severance pay and contributions is essential. Below is a detailed overview of the key considerations for both employers and employees.

Termination Process

In Sri Lanka, terminations may only occur through valid reasons such as:

  • Employee resignation
  • Mutual agreement
  • Employer-initiated termination without cause (with approval from the Commissioner of Labour and provision of severance payment)
  • Employer-initiated termination with cause (with reason in writing)

Notice Period

The minimum statutory notice period in Sri Lanka varies based on the employee's job role and the terms outlined in the contract or agreement. However, the standard notice period typically extends up to 6 months.

Severance Pay

Severance pay in Sri Lanka is applicable to employees with more than 5 years of service at the time of retirement, resignation, or dismissal. The employer is required to pay half a month's salary for each completed year of service.

Annual Leave Entitlements and Company Policies in Sri Lanka

The annual leave entitlement in Sri Lanka is 14 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays in Sri Lanka

Sri Lanka observes the following 24 public holidays, in addition to the paid annual leave entitlement for employees:

Holiday Date

Paid Time Off in Sri Lanka

Maternity Leave in Sri Lanka

Paternity Leave in Sri Lanka

Sick Leave in Sri Lanka

Duty Leave

Parental Leave In Sri Lanka

Sri Lanka's Benefits Built Into Playroll

Competitive benefits package in Sri Lanka

Playroll is committed to providing tailored, competitive benefits packages that are designed not only to attract but also retain top talent worldwide. Our global team of benefits experts build custom local packages to ensure your employees in Sri Lanka's needs are met. Typically our packages contain some or all of the following benefits.

Health Insurance
Pension or 401k
Life and Disability Insurance
Vision Insurance
Dental Insurance
Discounts & Perks

Playroll Supplementary Benefits For Employment In Sri Lanka

Make your benefits package in Sri Lanka a talent magnet with Playroll's local plans. We offer benefits that are compliant, comprehensive, and flexible — all at competitive rates. Speak with our local territory experts to explore the localized benefits we can offer you, while you scale your team.

Statutory benefits for employment in Sri Lanka

Sri Lanka provides a range of benefits to its employees, including:

  • Gratuity Payment
  • Social Security
  • Private Healthcare - Unisure (optional)
  • Private Healthcare - Allianz (optional)

Playroll allows you to provide localized benefits for employees in Sri Lanka within minutes. All in one manageable online dashboard. If you'd like specific information about our benefits packages in Sri Lanka create an account or contact our global expansion team, today.

Playroll Benefit Services

Playroll's Expertise in Facilitating Work Visas for Sri Lanka

At Playroll we're all about empowering employees to work anywhere, making mobility possible for global teams. We sponsor visas and hire the employee for you, so you don’t have to worry about payroll, taxes, and more.

It's important to note, visa support can be complicated. There are many variables that affect whether sponsorship is possible, including one’s nationality, education, marital status, and the immigration policy for the country in question.

Unfortunately, this means we can’t support visas everywhere - with that being said, we handle the entire visa process in-house, and dig into your situation to give you an overview of what to expect if we're able to help with visa sponsorship in Sri Lanka.

Playroll Immigration Support

Integrated EOR Platform

Legal and compliance experts are readily available to provide guidance and case-by-case Q&A support.

Accelerated Immigration Timeline

By leveraging dedicated support from in-house legal and compliance experts for case by case questions and more.

Hire in 50+ Countries

Accelerated Immigration Timeline

Acquiring a visa without an entity has never been easier, leverage Playroll's global coverage to sponsor and hire employees.

Playroll Visa Services

Hiring International Employees is Complex.

Playroll makes it easy!