Employer guide
Leave entitlements in Sri Lanka: annual, casual, sick, maternity and holidays (employer guide 2026)
Under the Shop and Office Employees Act a private-sector employee gets 14 days of paid annual leave from the second year (14, 10, 7 or 4 in the first year by the quarter joined), 7 days of casual leave, one and a half days off a week, every Poya day and the Gazetted mercantile holidays, and 84 working days of paid maternity leave. There is no separate statutory sick leave for shop and office staff.
Who these rules apply to
The Shop and Office Employees Act covers people employed in or about the business of a shop or office: retail, wholesale, offices of every kind, hotels and restaurants, banks and most service businesses. Factory workers and many trades follow the Wages Boards Ordinance instead, where each trade’s Wages Board decision sets its own leave numbers; most are close to the shop and office figures but check the decision for your trade. Government employees follow the Establishments Code, which is more generous (21 days of casual leave and 24 of vacation leave for most grades). This guide is about the private sector.
Leave entitlements at a glance
| Leave | Entitlement | First year | Section |
|---|---|---|---|
| Annual leave | 14 days with full pay per year of employment | 14 days if joined Jan–Mar; 10 Apr–Jun; 7 Jul–Sep; 4 Oct–Dec, taken in the following year | s.6(1) |
| Casual leave | 7 days with full pay per year, for private business or illness | 1 day for every two completed months of service, usable that year | s.6(3)–(4) |
| Sick leave | No separate statutory entitlement; illness is covered by casual leave and company policy | — | s.6(3) |
| Weekly holidays | One whole day and one half-holiday each week (customarily Sunday and Saturday afternoon), with pay | — | s.5 |
| Poya days | Every Full Moon Poya Day, with pay; 1.5× if worked | — | s.7A–7B |
| Mercantile (public) holidays | Up to nine Gazetted days a year, with pay; 2× or a day in lieu if worked with the Commissioner’s sanction | — | s.7 |
| Maternity leave | 84 working days with full pay for every live birth (14 before, 70 after confinement); 42 days where the child is not born alive | From day one of employment | s.18B–18C (Act 14 of 2018) |
| Nursing intervals | Two paid breaks in any 9 hours for a child under one: 30 minutes each with a crèche, 1 hour each without | — | s.18I |
| Paternity leave | None in the private sector by statute; 3 working days in the public sector | — | Establishments Code Ch. XII |
Do this automatically
Humanised applies these entitlements automatically: first-year proration, leave approvals in the app, Poya and mercantile holidays loaded, and no-pay flowing into payroll. From LKR 10,000/month for up to 15 employees.
See HR softwareAnnual leave: 14 days, and how the first year works
From the second year of continuous employment every shop and office employee earns 14 days of annual leave with full remuneration for each year worked. In the first year the entitlement depends on the quarter the person joined and is taken in the following year:
| Joined between | Annual leave for that first year |
|---|---|
| 1 January and 31 March | 14 days |
| 1 April and 30 June | 10 days |
| 1 July and 30 September | 7 days |
| 1 October and 31 December | 4 days |
The Act lets the employee take at least seven of the fourteen days consecutively, at a time agreed with the employer, and requires the leave to be given in the year after it was earned. Carry-forward beyond that and cash payment for untaken leave while still employed are matters of company policy, not statute. On termination, the employee must be allowed to take the previous year’s balance plus one day for every completed month of the current year (fourteen if ten or more months); if the notice period is too short, the employer pays for those days instead (s.6(6)–(7)). See leave encashment on termination.
Casual leave: 7 days
Casual leave is the seven paid days a year the Act gives for the employee’s private business or illness. In the first year it accrues at one day for every two completed months and can be used in that same year. The statute is silent on half-days; granting casual leave in half-day units is universal practice and a sensible policy line. Casual leave is not encashable, and unused casual leave lapses at the year end unless your policy says otherwise.
Sick leave: what the law does and does not say
The Shop and Office Employees Act has no separate sick-leave entitlement; illness is one of the purposes of the seven casual-leave days. Separate medical leave exists in some Wages Board trades, for trainees under the Employment of Trainees (Private Sector) Act, and in the public sector. Most private employers grant paid medical leave by policy (commonly 7 to 14 days with a medical certificate); write the number, the certificate rule and whether it is paid into the appointment letter or handbook so it is enforceable and consistent.
Weekly holidays, hours and overtime
Every shop and office employee is entitled to one whole day and one half-holiday each week with full pay (s.5); the Act does not name the days, so Saturday afternoon and Sunday is convention and a five-day week is common. Normal hours are 8 a day and 45 a week (s.3), with a meal interval. Overtime is limited to 12 hours a week and paid at not less than 1.5× the hourly rate; for monthly-paid staff the Regulations fix the hourly rate as one-eighth of the daily rate, and the daily rate as the monthly salary divided by 30, so monthly salary ÷ 240 (regs 6, 7 and 8(b)). The employer must keep records of leave taken and overtime worked (s.18) and produce them to a Labour Officer on request.
Poya days and mercantile holidays
Every Full Moon Poya Day is a paid holiday (s.7A); an employee who works on one must be paid at least 1.5× the normal daily rate (s.7B), and no day in lieu is due when a Poya falls on a weekly holiday or another declared holiday. The Minister declares up to nine further paid holidays a year by Gazette (s.7); working on one needs the Commissioner of Labour’s prior sanction and is compensated with a paid day in lieu by 31 December or double pay. The full 2026 list, with a calendar download, is in the mercantile holidays 2026 guide.
Maternity leave: 84 working days on full pay
Since the 2018 amendment (Act No. 14 of 2018), every female shop and office employee is entitled to 84 working days of maternity leave with full remuneration for each live birth: 14 days before and 70 days after confinement, with the balance taken after if the birth comes early. Where the child is not born alive the entitlement is 42 days. The earlier rule that reduced leave from the third child onwards has been repealed, and there is no half-pay tier in the private sector (the 84 full / 84 half / 84 no-pay structure applies to the public sector under the Establishments Code). A woman may not be dismissed by reason of pregnancy or confinement (s.18E), may not be given work that is harmful during the period the Act defines (s.18D), and is entitled to two paid nursing intervals in any nine-hour period for a child under one year: 30 minutes each where the employer provides a crèche, one hour each where it does not (s.18I). The Maternity Benefits Ordinance covers women outside the Shop and Office Act on the same basis.
No-pay leave and deductions
When leave is exhausted or an absence is not approved, the day is unpaid. The Act gives no formula for the daily deduction. The most common Sri Lankan practice is monthly salary ÷ 30 per day; some employers divide by the working days in the month. Whatever you choose, put it in the appointment letter or handbook, apply it consistently, and show the deduction with the number of days on the payslip. No-pay reduces EPF-liable earnings, so EPF and ETF are calculated on the reduced amount. Use the no-pay calculator to check a figure.
Leave policy checklist for employers
- State the leave year (calendar year is the statutory default) and the first-year proration table in the appointment letter.
- Say how annual leave is applied for and approved, and that at least seven days may be taken together.
- Define casual leave in half-day units and what counts as an emergency.
- Set the medical leave policy: days, whether a certificate is needed, whether it is paid.
- Record the weekly holiday and half-holiday days, and the overtime rate and hourly divisor (÷240).
- Load the year’s Poya and mercantile holidays into the attendance system in January.
- Write the maternity procedure: notice, the 14 + 70 split, nursing breaks, return to the same post.
- Keep the leave and overtime register the Act requires (s.18); an HR system does this automatically.
- On exit, settle accrued annual leave per s.6(6) with the final salary.
Reform on the horizon
The 2023 draft Employment Act that would have consolidated the Shop and Office Employees Act, the Wages Boards Ordinance and other statutes was not enacted; in 2025 the Ministry moved to four separate bills, and in June 2026 the Minister said a unified draft would be released for public comment by the end of 2026. Nothing has been gazetted. We will update this guide within two working days of any change and note it here.
Do this automatically
Humanised applies these entitlements automatically: first-year proration, leave approvals in the app, Poya and mercantile holidays loaded, and no-pay flowing into payroll. From LKR 10,000/month for up to 15 employees.
See HR softwareFrequently asked questions
How many days of annual leave are private-sector employees entitled to in Sri Lanka?
14 days with full pay from the second year of continuous employment (Shop and Office Employees Act s.6(1)(b)). In the first year it is 14, 10, 7 or 4 days depending on whether the employee joined in the first, second, third or fourth quarter, taken in the following year.
How many casual leave days per year?
Seven days per year of employment (s.6(3)). In the first year, one day for every two completed months of service, usable in that year (s.6(4)).
Is there separate sick leave under Sri Lankan labour law?
Not for shop and office employees: illness is covered by the seven days of casual leave. Separate medical leave exists in some Wages Board trades, for trainees and in the public sector, and most private employers grant it by policy.
Can annual leave be carried forward or encashed?
The Act requires annual leave to be taken in the year after it is earned and is silent on carry-forward beyond that, so it is company policy. Encashment is statutory only on termination when the notice period is too short to take the balance (s.6(6)).
What happens to unused leave when an employee resigns?
The employee must be allowed to take last year’s balance plus one day for each completed month of the current year (14 if ten or more months) before leaving; if notice is too short the employer pays for those days (s.6(6)–(7)).
Is Saturday a half day under the Shop and Office Act?
The Act requires one whole day and one half-holiday a week (s.5) but does not name the days. Saturday afternoon and Sunday is the convention; a full five-day week is common and compliant.
How is overtime calculated?
At least 1.5× the hourly rate, up to 12 overtime hours a week. For monthly-paid staff the Regulations set the hourly rate at one-eighth of the daily rate and the daily rate at monthly salary ÷ 30, so monthly salary ÷ 240 (regs 6–8).
How many days of maternity leave, and is it half pay after the second child?
84 working days on full pay (14 before and 70 after confinement) for every live birth since the 2018 amendment, and 42 days where there is no live birth. There is no half-pay rule in the private sector; the old third-child reduction was repealed.
Is paternity leave mandatory in Sri Lanka?
Only in the public sector, where the Establishments Code gives three working days within three months of the birth. Private employers may grant it by policy; no statute requires it.
Are nursing mothers entitled to feeding breaks?
Yes. Two paid nursing intervals in any nine-hour period for a child under one year: 30 minutes each where a crèche is provided, one hour each where it is not, in addition to meal breaks (s.18I).
How is no-pay leave deducted?
There is no statutory formula. The common practice is monthly salary ÷ 30 per day; some employers use working days. State the method in the appointment letter or handbook and apply it consistently.
Do Wages Board employees get the same leave?
Each Wages Board decision sets its own annual, casual and sometimes medical leave for that trade. The figures are broadly similar to the Shop and Office Act but must be checked in the Gazetted decision for the trade.
Related guides and tools
Sources. Shop and Office Employees (Regulation of Employment and Remuneration) Act No. 19 of 1954; Shop and Office Employees (Amendment) Act No. 14 of 2018 (maternity provisions); Maternity Benefits Ordinance No. 32 of 1939 as amended; Establishments Code, Chapter XII (public-sector leave and paternity leave); Mercantile holidays 2026 (Gazette). This guide is general information for employers, not legal or tax advice; figures are checked against the sources on the review date shown above and again every 1 January and 1 April. See our editorial approach.