Sri Lanka

• Duruthu Full Moon Poya
• Tamil Thai Pongal Day
• National Day
• Navam Full Moon Poya
• Maha Shivratri
• Madin Full Moon Poya
• Bak Full Moon Poya Day
• Good Friday
• Day prior to Sinhala & Tamil New Year Day
• Sinhala & Tamil New Year Day
• Idul-Fitr
• May Day
• Vesak Full Moon Poya
• Vesak Full Moon Poya Holiday
• Poson Full Moon Poya
• Idul Adha
• Esala Full Moon Poya
• Nikini Full Moon Poya
• Adhi Nikini Full Moon Poya Day
• Milad-un-Nabi
• Binara Full Moon Poya Day
• Vap Full Moon Poya Day
• Deepavali
• III Full Moon Poya
• Christmas Day
• Unduvap Full Moon Poya.

Working Hours

Normal working hours cannot exceed eight hours in any one day and 45 hours in any one week.

Minimum Wage

Effective 1 April 2025, the monthly minimum wage is Rs 27,000 and daily minimum wage is Rs 1,080.

A further increase will take effect on 1 January 2026, raising the monthly minimum wage to Rs 30,000 and the daily minimum wage to Rs 1,200.

Employee Tax

Annual income	Tax rate
Up to LKR 500,000	6%
LKR 500,001 - 1,000,000	12%
LKR 1,000,001 - 1,500,000	18%
LKR 1,500,001 - 2,000,000	24%
LKR 2,000,001 - 2,500,000	30%
More than LKR 2,500,000	36%
Employees Provident Fund contribution	8%

Bonuses

There are no statutory bonus schemes in Sri Lanka.

Contracts in Sri Lanka must be in writing and must include the following:

• The name and job title of the employee;
• Start date;
• The grade to which the person is appointed;
• Basic remuneration and the scale of remuneration;
• Whether the remuneration is paid weekly, fortnightly or monthly;
• Cost of living allowance, if any;
• The period of probation;
• Conditions governing the employment and termination;
• Normal hours of work;
• Number of weekly rest days and annual holidays;
• Overtime rate payable.

The contract must be written in a language that is understandable by the worker and must be duly signed by the employer.

Fixed-term contracts are allowed.

Annual Leave

An employee is entitled to take annual leave from the first calendar year after employment. For the first year, the annual leave entitlement is:

• 14 days if employment commences between 1st January and 1st April.
• 10 days if employment commences between 1st April and 1st July.
• 7 days if employment commences between 1st July and 1st October.
• 4 days if employment commences after 1st October.

From the second year of service, employees are entitled to 14 days of paid annual leave.

Sick Leave

In Sri Lanka, every employee certified by a medical practitioner is entitled to a paid sick leave for a period of seven days per year. Sick leave is fully paid by the employer.

Parental Leave

Sri Lanka offers 84 days’ paid leave for the birth of the employee’s first child, second child, and all subsequent children. Maternity leave is fully paid by the employer.

There is no provision for paternity leave in the labour laws of Sri Lanka, nor is there any provision for paid or unpaid parental leave.

Termination Process

In Sri Lanka, an employee can only be terminated by an employer in the following circumstances:

• With the prior written approval of the Commissioner of Labour.
• With the employee’s consent.
• Where there is justifiable cause for termination.

Termination with notice by the employer without justifiable cause is unenforceable and considered unjust termination.

If an employee has been employed for over a year, they are entitled to one month's notice. If they've been employed less than one year, they are not entitled to any notice.

Severance Pay

Employees who have completed five years of service are entitled to a gratuity at the following rate:

• Half a month’s wages for each completed year of service for monthly paid employees
• 14 days' salary for each year of completed service for other employees.

This amount is payable in all circumstances.

Redundancies are compensated according to service length:

• 2.5 months’ pay per year of service for 1 to 5 years.
• 2 months’ pay per year of service for 6 to 14 years.
• 1.5 months’ pay per year of service for 15 to 19 years.
• 0.5 months’ pay per year of service for 25 to 34 years.

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