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
15.00%
Payroll Cycle
Monthly
Time zone
UTC +5:30
Capital city
Sri Jayawardenepura Kotte
Hire Employees in Sri Lanka
The NNRoad Advantage ☺
Pay as you go
Global account manager
Compliance
Fast Onboarding
Foreigner Visas
Platform
Employer of Record in Sri Lanka
01.
Candidate Selection
02.
Employee Onboarding
03.
Compliance & Payroll
04.
Payroll Reporting
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
01.
Compliance & Payroll
02.
Payroll Reporting
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:
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
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.
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.
Overtime
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
Severance
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):
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.
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.