Employer guide
APIT for employers in Sri Lanka 2025/26: tax tables, rates, monthly remittance, T10 and penalties
APIT (Advance Personal Income Tax) is the income tax every Sri Lankan employer must deduct from employees’ pay each month and remit to the Inland Revenue Department by the 15th of the following month. For 2025/26 the first LKR 1,800,000 a year (LKR 150,000 a month) is relief-free, then tax runs at 6%, 18%, 24%, 30% and 36% in bands. The employer files monthly schedules, gives each employee a T10 by 30 April, and files the annual statement by the same date.
What APIT is and who must deduct it
APIT replaced PAYE under the Inland Revenue Act No. 24 of 2017. Section 83 makes every employer a withholding agent: it must deduct tax from each payment of employment income according to the IRD’s tables, and subsection (2) says that obligation is not reduced by any other deduction the employer makes or by any other law. Since the 2023 amendments the deduction is mandatory for every employee; the earlier arrangement under which an employee could decline to have APIT deducted no longer applies. The tax year runs from 1 April to 31 March.
Table 1: monthly deduction for regular pay (2025/26)
Table 1 applies to the regular monthly remuneration of resident employees with one employment. Annualise the monthly pay, subtract the personal relief, apply the bands, and divide by twelve:
| Annual taxable income after relief | Rate |
|---|---|
| Personal relief | First LKR 1,800,000 a year (LKR 150,000 a month) at 0% |
| First LKR 1,000,000 | 6% |
| Next LKR 500,000 | 18% |
| Next LKR 500,000 | 24% |
| Next LKR 500,000 | 30% |
| Balance | 36% |
Do this automatically
Humanised applies the IRD tables to every employee each pay run, including Table 2 bonuses and Table 5 cumulative catch-up, produces the monthly schedule and the T10, and updates the tables when the IRD does. From LKR 10,000/month for up to 15 employees.
See payroll softwareThe other tables: bonuses, terminal benefits, non-residents, cumulative and secondary employment
| Table | Applies to | What the employer does |
|---|---|---|
| Table 2 | Lump-sum payments: bonus, incentive, leave encashment, arrears, share-scheme allotments | Add the lump sum to the year’s regular pay, find the rate for the cumulative total, and deduct on the lump sum giving credit for tax already deducted |
| Table 3 | Terminal benefits: gratuity, compensation, commuted pension, ETF payments | Apply the Table 3 rates and thresholds for once-and-for-all payments; retain and remit as directed |
| Table 4 | Non-resident, non-citizen employees | Deduct at the Table 4 rates regardless of relief |
| Table 5 | Employees whose cumulative pay in the year crosses the guideline thresholds because of higher pay in some months, or who start or leave mid-year | Switch to the cumulative method for the rest of the year so the annual tax is right |
| Table 6 | Employers who bear the tax on behalf of the employee (tax-on-tax) | Gross up using Table 6 |
| Table 7 | Secondary employment (employee has not given the primary-employment declaration, or has more than one employer) | Deduct at the Table 7 flat rates with no relief |
| Table 8 | Employees of foreign employers | Per the IRD table |
Non-cash benefits count as remuneration: the IRD’s valuation circular sets monthly values for company vehicles (by engine capacity and whether fuel and a driver are provided), housing (rental value or a percentage of pay), and other benefits, which are added to taxable pay before the tables are applied.
Monthly duties: remittance by the 15th and the schedule
Section 86(1) of the Act requires every withholding agent to pay the tax withheld in a month to the Commissioner General within fifteen days after the end of that month; the IRD guideline states it as on or before the 15th of the following month. Payment is made under the employer’s TIN through a bank or the IRD’s online payment facility with the APIT payment code, and the monthly schedule of employees and deductions is filed through the RAMIS e-services portal. Keep the payment receipt and the schedule for each month; they reconcile to the annual statement.
- Register as an employer with the IRD and obtain a TIN before the first pay run with taxable employees.
- Collect each employee’s TIN and primary-employment declaration; without the declaration Table 7 applies.
- Deduct APIT on every payment of employment income in the month, including allowances, non-cash benefits and lump sums.
- Remit by the 15th of the following month and file the monthly schedule on RAMIS.
Annual duties: the T10 and the annual statement of employer
After the year ends on 31 March the employer must give every employee a T10 certificate (the certificate of tax deducted) on or before 30 April, or within 30 days of termination for an employee who leaves during the year, and file the Annual Statement of Employer with its schedules by the same 30 April date. The statement has three schedules: Schedule 01 for regular remuneration, Schedule 02 for once-and-for-all payments (terminal benefits), and Schedule 03 listing employees below the threshold from whom no APIT was deducted. E-filing is mandatory for companies. Our separate guide covers the T10 form and annual statement line by line.
Penalties for late payment or failure to deduct
The Act treats withheld tax as the Commissioner General’s money in the employer’s hands. Under section 86(3) an employer who fails to withhold must still pay the tax that should have been withheld, at the same time as if it had been withheld; under section 86(4) the employee is jointly and severally liable with the employer for that tax, and the employer may recover from the employee only what the Act allows. Late payment attracts interest and penalties under the Act’s administrative provisions, and late annual statements attract a penalty per return. Outsourcing payroll does not change who the IRD holds responsible: section 83(2) fixes the obligation on the employer.
What changes each April, and how to stay current
The relief and bands are set by amendment to the Inland Revenue Act and take effect from 1 April; the IRD then republishes Tables 1 to 8 and the guideline for the new year of assessment. The current tables (2025/26) took effect on 1 April 2025. Payroll software that updates its tables centrally removes the risk of running a year on the old bands. This guide is reviewed each 1 January and 1 April and after any IRD notice; the review date is at the top.
Monthly and annual APIT checklist
- Every employee’s taxable pay includes allowances, non-cash benefit values and any lump sum this month.
- Table 1 for regular pay; Table 2 for bonuses; Table 5 for anyone whose cumulative pay has crossed the threshold or who joined or left mid-year; Table 7 for anyone without a primary-employment declaration.
- APIT paid by the 15th of the following month; monthly schedule filed on RAMIS; receipt filed.
- T10 issued to every employee by 30 April, and within 30 days to leavers.
- Annual Statement of Employer with Schedules 01 to 03 filed by 30 April.
- Tables updated on 1 April each year.
Do this automatically
Humanised applies the IRD tables to every employee each pay run, including Table 2 bonuses and Table 5 cumulative catch-up, produces the monthly schedule and the T10, and updates the tables when the IRD does. From LKR 10,000/month for up to 15 employees.
See payroll softwareFrequently asked questions
What are the APIT rates for 2025/26?
After a personal relief of LKR 1,800,000 a year (LKR 150,000 a month): 6% on the first LKR 1,000,000, 18% on the next 500,000, 24% on the next 500,000, 30% on the next 500,000 and 36% on the balance (IRD Table 1, effective 1 April 2025).
When must APIT be paid to the IRD?
Within fifteen days after the end of the month in which it was deducted, so on or before the 15th of the following month (Inland Revenue Act s.86(1)).
Is APIT deduction mandatory or can an employee opt out?
Mandatory. Since the 2023 amendments every employer must deduct APIT from every employee’s employment income; the earlier consent arrangement no longer applies (s.83).
How is APIT on a bonus calculated?
With Table 2: add the bonus to the year’s regular pay, find the rate for the cumulative total and deduct on the bonus, giving credit for tax already deducted.
What is the T10?
The certificate of APIT deducted that the employer gives each employee for the year of assessment, on or before 30 April, or within 30 days of termination.
When is the Annual Statement of Employer due?
On or before 30 April after the year of assessment ends on 31 March, with Schedules 01 (regular pay), 02 (terminal benefits) and 03 (employees below the threshold). Companies must e-file.
What happens if an employer fails to deduct APIT?
The employer must still pay the tax that should have been withheld (s.86(3)), the employee is jointly and severally liable (s.86(4)), and interest and penalties apply.
Are non-cash benefits taxable under APIT?
Yes. The IRD’s valuation rules give monthly values for company vehicles, housing and other benefits, which are added to taxable pay before the tables are applied.
Related guides and tools
Sources. IRD, APIT tax tables 2025/2026 (Tables 1 to 8 and the employer guideline); Inland Revenue Act No. 24 of 2017, consolidated with 2025 changes (ss.83, 86); IRD, instructions to complete the Annual Statement of Employer and schedules; IRD, guideline for employers on deducting APIT. 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.