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Overtime calculator Sri Lanka (Shop and Office Act rates)
Enter the monthly salary and the overtime hours to get overtime pay at the Shop and Office Employees Act minimum: the hourly rate is the monthly salary ÷ 240 (one-eighth of the daily rate, regulation 8(b)), normal-day overtime is paid at 1.5×, and work on Poya days at 1.5× or on declared mercantile holidays at 2×.
How it is calculated
- Hourly rateFor monthly-paid shop and office employees the Regulations fix it: one-eighth of the daily rate, and the daily rate is the monthly salary ÷ 30, so the hourly rate is monthly salary ÷ 240 (Shop and Office Employees Regulations, reg. 8(b)). Some employers use ÷200, which pays more than the minimum.
- Normal daysHourly rate × 1.5 × overtime hours. Overtime is limited to 12 hours a week for shop and office employees.
- Poya and holidaysPoya day work: at least 1.5× (s.7B). Work on a declared mercantile holiday: 2× or a paid day in lieu by 31 December (s.7(2)).
- Payroll treatmentOvertime is taxable remuneration for APIT but is generally not EPF-liable; show it as its own payslip line.
Wages Board trades have their own overtime rates and hour limits set by each board; check the decision for your trade. Night work and female employees have further restrictions under the Act.
Rates used
| Item | Rate or amount | Applies to |
|---|---|---|
| APIT personal relief | LKR 1,800,000 per year (LKR 150,000 per month) | Resident employees, IRD Table 1 |
| APIT band | Next LKR 1,000,000 at 6% | Annual taxable income after relief |
| APIT band | Next LKR 500,000 at 18% | Annual taxable income after relief |
| APIT band | Next LKR 500,000 at 24% | Annual taxable income after relief |
| APIT band | Next LKR 500,000 at 30% | Annual taxable income after relief |
| APIT band | Balance at 36% | Annual taxable income after relief |
| EPF employee | 8% | EPF-liable earnings, deducted from employee |
| EPF employer | 12% | EPF-liable earnings, paid by employer |
| ETF employer | 3% | EPF-liable earnings, paid by employer |
| Gratuity | Half a month’s salary per completed year | After 5 years; employers with 15+ staff |
Sources: IRD APIT tax tables 2025/26, EPF, ETF Board, Payment of Gratuity Act No. 12 of 1983. Last reviewed 3 September 2026.
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See Humanised payroll softwareFrequently asked questions
What is the overtime rate in Sri Lanka?
At least one and a half times the normal hourly rate for shop and office employees, under the Shop and Office Employees Act. Work on a Poya day is paid at 1.5×; work on a declared mercantile holiday at 2× or with a paid day in lieu by 31 December.
How do I calculate the hourly rate for overtime?
For monthly-paid shop and office employees the Shop and Office Employees Regulations (reg. 8(b)) fix it: the daily rate is the monthly salary divided by 30, and the hourly rate is one-eighth of that, so monthly salary ÷ 240. Some employers divide by 200, which pays above the minimum and is allowed.
What is the maximum overtime allowed?
Twelve hours a week for shop and office employees, on top of the normal 45-hour week (8 hours a day). Wages Board trades have their own limits.
Is overtime EPF-liable?
Generally no: EPF and ETF are calculated on basic salary and regular allowances, not overtime. Overtime is taxable for APIT.
Can I pay a fixed overtime allowance instead?
Only if it never falls below what the Act would require for the hours actually worked; a fixed allowance that under-pays real hours is not compliant. Keep the attendance record either way.
Do overtime rules differ for factory workers?
Yes. Factory and Wages Board trades follow the Factories Ordinance and the relevant Wages Board decision, which set their own hours, rates and limits.