Hire in Sri Lanka

Sri Lanka PEO &

Employer of Record

Hire & manage teams remotely in Sri Lanka without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.

    Business Language

    Sinhalese, Tamil

    Salary Currency

    Sri Lankan Rupee (LKR)

    Payroll tax


    Payroll Cycle


    Time zone

    UTC +5:30

    Capital city

    Sri Jayawardenepura Kotte

    Hire Employees in Sri Lanka

    NNRoad provides employer of record (EOR)professional employment organization (PEO) services to ensure that your business in Sri Lanka complies with local labor laws and regulations. We process monthly payroll and act as the Employer of Record, taking on all local employer liabilities.

    The NNRoad Advantage ☺

    Pay as you go

    No set-up or overhead costs to global expansion.

    Global account manager

    One point of contact for all of our 50+ serviced countries and regions.


    Ensured compliant contracts and operations.

    Fast Onboarding

    Start working with your remote employees/contractors within a week.

    Foreigner Visas

    NNRoad assists with overseas foreign hires visa needs.


    Access your payroll reports and employee pay stubs on our portal.

    Employer of Record in Sri Lanka

    Employer of Record (EOR) services are for companies who do not have a legal entity in Sri Lanka, but who want to hire localy. Employment and full liability are outsourced to NNRoad.


    Candidate Selection

    You interviews & select the candidates you want to hire in Sri Lanka.


    Employee Onboarding

    We sign a local labor contract with your employees based in Sri Lanka.


    Compliance & Payroll

    We manage monthly payroll, mandatory benefits & all HR compliance in Sri Lanka.


    Payroll Reporting

    See all payroll reports on our platform & focus on your business in Sri Lanka.

    Recruiting process outsourcing – including but not limited to resume screening, shortlisting candidates, coordination for interviews, and assistance for salary negotiation.

    Hiring and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire).

    On-boarding and off-boarding employees following labor law practice.

    Complete payroll solution and benefit administration

    Employee management – employee record retaining, time keeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law.

    Mandatory insurance compliance (i.e. pension, labor and health insurance) according to the local labor laws.

    Payment management (Invoicing customers/clients and vendor payments).

    Work VISA application assistance, if needed.

    Local individual income tax reporting.

    Payroll & PEO in Sri Lanka

    Professional Employment Organization (PEO) services are for companies who have a legal entity in Sri Lanka, and want to outsource their payroll. Employment liabilities are shared between your organization and NNRoad.


    Compliance & Payroll

    We manage monthly payroll, mandatory benefits & all HR compliance in Sri Lanka.


    Payroll Reporting

    See all payroll reports on our platform & focus on your business in Sri Lanka.

    Registering the necessary company and personnel information for payroll calculation in the payroll software and system

    Monthly Payroll Processing

    Year-End Adjustment and Annual Declaration


    Taxes & Payroll in Sri Lanka

    Employee Income Taxes:

    Individual income tax rates in Sri Lanka are based on progressive tax brackets.

    Resident individuals are subject to income tax on their worldwide income. Non-resident individuals are taxed only on their Sri Lanka-sourced income.

    Tax Brackets

    6%: 0 – 3,000,000 LKR
    12%: 3,000,000 – 6,000,000 LKR
    18%: Over 6,000,000 LKR

    Sample Calculation


    Employer Costs in Sri Lanka

    Employer Contribution

    12% – Provident Fund (EPF)
    3% – Employee Trust Fund

    Total employment cost: 15%

    Employee Contribution

    8% – Provident Fund (EPF)

    Total employment cost: 8%

    Benefits & Insurance in Sri Lanka

    Pension Fund

    The Employees’ Provident Fund (EPF) was established under the EPF Act No.15 of 1958 (Act) as a mandatory defined contribution retirement scheme for the private and semi-government sector employees who do not enjoy pension benefits.

    It is required by the law that both employers and employees contribute the fund. The purpose of the fund is to give a pension for employees that retire. The retirement ages are 55 years old for males and 50 years old for females.

    Employees in Sri Lanka

    Working Hours in Sri Lanka

    Working Hours Per Week

    The normal working hours of a regular employee shall not exceed 8 hours per day. In any one week, working hours shall not exceed 45 hours. Overtime shall not exceed an aggregate of 12 hours in any one week.


    No employee is required to work overtime, unless he is paid separately for such overtime work in respect of each hour, at a rate not less than 1.5 times the hourly rate of his ordinary remuneration.

    Termination Laws in Sri Lanka


    Workers who have worked for an employer with fifteen or more employees for five years are entitled to severance pay at the following rates if the services are terminated (whether by the employer or the employee, or on retirement or death, or by operation of law, or otherwise):

  • Half a month’s wages or salary for each completed year of service for monthly rated workmen;
  • 14 days salary for each year of completed service for other workmen.

    Notice Period

    The IDA and the TEWA oversee the dismissal process in Sri Lanka, and termination of employment for non-disciplinary grounds usually necessitates clearance from the Commissioner of Labor. Non-disciplinary termination requires a notice period (typically one month) that is mutually agreed in the contract of employment.

  • Employment Contract in Sri Lanka

    Employment Contract

    The written employment contract must include the following particulars: the name of the employee and designation and nature of the appointment; the date on which the appointment takes effect; the grade to which the person is appointed; basic remuneration and the scale of remuneration; probation period; working hours.

    Sri Lankan labor law allows for the hiring of fixed-term contract workers for long-term duties.

    Probation Period

    In Sri Lanka, there is no explicit provision in the labor rules regarding the length of a probationary period. Probation typically lasts six months.

    Employer of Record in sri lanka PEO

    Types of Leaves in Sri Lanka

    Annual Leave

    After completing a complete year of employment, employees are entitled to 14 days of yearly leave. Annual leave is accrued based on the date the employee joined the organization after the first year.

    Sick Leave

    All employees are entitled to 7 days of sick leave per year.

    Maternity Leave

    Women with no or one child are entitled to twelve weeks of maternity leave. Two weeks prior to the due date and ten weeks after the due date should be taken.

    Women with two or more children are entitled to six weeks of maternity leave. Two weeks prior to the due date and four weeks after the due date should be taken.

    Public Holidays in Sri Lanka

    Public Holidays

  • Tamil Thai Pongal Day – January 14
  • Duruthu Full Moon Poya Day – January 17
  • National Day – February 4
  • Navam Full Moon Poya Day – February 16
  • Mahasivarathri Day – March 1
  • Madin Full Moon Poya Day – March 17
  • Sinhala & Tamil New Year Day – April 13-14
  • Good Friday – April 15
  • Bak Full Moon Poya Day – April 16
  • May Day – May 1
  • Id Ul-Fitr – May 3
  • Vesak Full Moon Poya Day – May 15-16
  • Poson Full Moon Poya Day – June 14
  • Id Ul-Alha – July 10
  • Esala Full Moon Poya Day – July 13
  • Nikini Full Moon Poya Day – August 11
  • Binara Full Moon Poya Day – September 10
  • Milad un-Nabi – October 9
  • Vap Full Moon Poya Day – October 9
  • Deepavali – October 24
  • Ill Full Moon Poya Day – November 7
  • Unduvap Full Moon Poya Day – December 7
  • Christmas Day – December 25
  • Resources