Employer guide
Minimum wage and basic salary in Sri Lanka: the employer’s guide (2026)
The national minimum wage in Sri Lanka is LKR 30,000 a month and LKR 1,200 a day from 1 January 2026, set by the National Minimum Wage of Workers (Amendment) Act No. 11 of 2025. It applies to every worker in any industry or service, and the former Budgetary Relief Allowances of LKR 3,500 were folded into it on 1 April 2025, so nothing is payable on top. Basic salary is a payroll convention, not a legal term: EPF, ETF and APIT are calculated on total earnings.
Minimum wage in Sri Lanka in 2026: the numbers
The National Minimum Wage of Workers Act No. 3 of 2016 sets a single floor for every worker in any industry or service. The 2025 amendment, certified on 23 July 2025 and deemed to operate from 1 April 2025, raised it in two steps:
| Measure | Amount | Effective from | Legal source |
|---|---|---|---|
| Minimum monthly wage | LKR 30,000 | 1 January 2026 | Act No. 3 of 2016 s.3(1)(b), as substituted by Act No. 11 of 2025 |
| Minimum daily wage | LKR 1,200 | 1 January 2026 | Same |
| Budgetary Relief Allowance | None payable separately | 1 April 2025 | Consolidated into the minimum wage: Act No. 11 of 2025 s.3; BRA (Amendment) Acts Nos. 9 and 10 of 2025 |
The Act sets a floor, not a rate for any trade. Where a Wages Board decision for the employee’s trade sets a higher minimum, the higher figure applies.
Minimum wage history
| Effective from | Monthly | Daily | Instrument |
|---|---|---|---|
| 2016 | LKR 10,000 | LKR 400 | National Minimum Wage of Workers Act No. 3 of 2016 |
| August 2021 | LKR 12,500 | LKR 500 | Amendment Act No. 16 of 2021 |
| September 2024 | LKR 17,500 | LKR 700 | Amendment Act No. 48 of 2024 (with the LKR 3,500 BRA, the effective floor was LKR 21,000) |
| 1 April 2025 | LKR 27,000 | LKR 1,080 | Amendment Act No. 11 of 2025 s.3(1)(a); BRA absorbed |
| 1 January 2026 | LKR 30,000 | LKR 1,200 | Amendment Act No. 11 of 2025 s.3(1)(b) |
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Humanised checks every employee against the current minimum wage, calculates EPF, ETF and APIT on the right earnings base, and updates the statutory figures when the law changes. From LKR 10,000/month for up to 15 employees, no setup fee.
See payroll softwareWho the minimum wage applies to
The 2016 Act applies to every worker employed in any industry or service, whether paid monthly, daily or by piece, and regardless of the size of the employer. In practice:
- Permanent, probationary, casual, temporary and contract employees are all covered from the first day of work.
- Daily-paid workers must receive at least LKR 1,200 for each day worked; monthly-paid workers at least LKR 30,000 for the month.
- Part-time workers are paid pro rata, but the daily minimum applies to each full day worked.
- Where a Wages Board decision sets a higher minimum for the trade (for example the tea and rubber growing trades, where the daily wage was set at LKR 1,350 basic plus incentives in 2024 and rose again in 2026), the Wages Board figure applies.
- Section 4 of the 2025 amendment forbids an employer from reducing any allowance to cancel out the increase: the new floor must be a real rise in what the worker takes home.
- Section 5 allows the Commissioner General of Labour to direct principal employers who use contractors or labour suppliers to ensure the contractor’s workers are paid the minimum.
Budgetary Relief Allowance: do I still have to pay it?
No, not as a separate line. Two Acts created the allowances: the Budgetary Relief Allowance of Workers Act No. 36 of 2005 (LKR 1,000 a month for workers earning up to LKR 20,000, tapering to zero at LKR 21,000) and the Budgetary Relief Allowance of Workers Act No. 4 of 2016 (LKR 1,500 from May 2015 plus LKR 1,000 from January 2016, a total of LKR 2,500, for workers earning up to LKR 40,000). Both Acts made the allowance part of wages for EPF, ETF, overtime, holiday pay and gratuity.
In 2025 Parliament ended both allowances on 31 March 2025 (Amendment Acts Nos. 9 and 10 of 2025) and section 3 of the minimum wage amendment states that the allowances payable on that date form part of each worker’s wage from 1 April 2025. The Ministry of Labour’s explanation was that the LKR 3,500 previously paid as BRA is added to basic pay, and that benefits calculated on basic pay rise with it.
| Period | BRA position | Source |
|---|---|---|
| 1 August 2005 to 31 March 2025 | BRA 1: LKR 1,000 (earnings up to LKR 20,000, tapering to LKR 21,000) | Act No. 36 of 2005 s.3; ended by Act No. 9 of 2025 |
| 1 May 2015 to 31 March 2025 | BRA 2: LKR 1,500 + LKR 1,000 (earnings up to LKR 40,000) | Act No. 4 of 2016; ended by Act No. 10 of 2025 |
| From 1 April 2025 | Consolidated into the national minimum wage; no separate allowance | Act No. 11 of 2025 s.3 |
What this means on the payslip: an employee who was on LKR 17,500 basic plus LKR 3,500 BRA on 31 March 2025 must show at least LKR 27,000 from April 2025 and at least LKR 30,000 from January 2026, with the BRA lines removed and the amount added to the wage. Employers who still show “BRA” as a separate allowance are not wrong in substance, but the total must meet the new floor and the allowance counts as wages for every statutory calculation.
What is basic salary in Sri Lanka?
None of the Acts defines “basic salary”. The Shop and Office Employees Act speaks of remuneration, the Wages Boards Ordinance of wages, and the EPF Act of earnings. Basic salary is the payroll convention for the fixed, unconditional part of monthly pay, before allowances, overtime and incentives are added. Employers use it as the reference point for increments, no-pay deductions and gratuity, and appointment letters usually state it separately from allowances.
The convention matters because several calculations are commonly run on basic, while the law runs most statutory calculations on a wider base. The table below shows which is which.
What depends on basic salary, and what depends on total earnings
| Calculation | Base | Rate | Guide |
|---|---|---|---|
| Minimum wage test | The monthly or daily wage, including the amounts that were BRA; a reduction of allowances to fund the increase is forbidden (Act No. 11 of 2025 s.4) | LKR 30,000 / 1,200 | This page |
| EPF | Total earnings: wages, cost-of-living and similar allowances, holiday pay, cash value of food (EPF Act s.47); not overtime, reimbursements or bonuses | 8% employee + 12% employer | EPF guide |
| ETF | Same base as EPF | 3% employer | ETF guide |
| Gratuity | Last drawn monthly wage or salary; most employers use basic plus fixed allowances, and the Labour Department reads “wage” widely | Half a month per completed year after five years | Gratuity calculator |
| Overtime (Shop and Office Act) | Hourly rate = monthly remuneration ÷ 240 (regs 6–8) | 1.5× | Overtime calculator |
| No-pay deduction | No statutory formula; monthly salary ÷ 30 per day is the common practice, stated in the contract | — | No-pay calculator |
| APIT | All employment income: basic, every allowance, non-cash benefits and lump sums | 6% to 36% after LKR 150,000 a month relief | APIT guide |
| Stamp duty | Total monthly remuneration above LKR 25,000 | LKR 25 per payment | Stamp duty guide |
Allowances in Sri Lankan payroll: statutory, contractual and optional
| Allowance | Status | EPF / ETF | APIT |
|---|---|---|---|
| Budgetary Relief Allowance | Ended 31 March 2025; now part of the wage | Yes (as wages) | Yes |
| Cost-of-living allowance | Contractual, or set by a Wages Board decision for the trade | Yes | Yes |
| Attendance, shift or production incentive | Contractual; variable | Fixed monthly: yes. Genuine incentives: no | Yes |
| Transport or fuel allowance | Contractual | Fixed allowance: yes. Reimbursement of actual travel: no | Yes, unless a reimbursement |
| Meal allowance / food provided | Contractual | Yes (cash value of food counts) | Yes |
| Housing, phone, vehicle | Contractual or non-cash benefit | Fixed cash allowance: yes | Yes, at IRD valuation for non-cash benefits |
| Overtime | Statutory rate under the Shop and Office Act or Wages Board | No | Yes |
| Bonus | Contractual or discretionary | No | Yes (Table 2) |
Worked example: a compliant pay structure at the minimum wage
An office assistant paid the 2026 minimum:
Now the same employer pays a supervisor LKR 60,000. Structured as LKR 45,000 basic plus a LKR 15,000 fixed transport allowance, EPF and ETF are still due on the full LKR 60,000, because a fixed monthly allowance is earnings under the EPF Act. The only calculations that move with the basic figure are the ones the employer runs by convention, such as no-pay deductions and increments. Reducing basic to shrink contributions is a common inspection finding and does not work for EPF, ETF or APIT. Check any structure with the salary calculator.
Stamp duty on salary
Where an employee’s monthly remuneration exceeds LKR 25,000, LKR 25 stamp duty applies to the salary receipt under the Stamp Duty (Special Provisions) Act No. 12 of 2006, remitted to the Inland Revenue Department quarterly by employers registered as compounding authorities. The full mechanics, forms and deadlines are on our stamp duty on salaries page.
What is the average salary in Sri Lanka?
The only national figures come from the Department of Census and Statistics Labour Force Survey. Its 2024 annual report puts the mean monthly salary of employees at about LKR 63,000 for men and LKR 51,700 for women, with a median monthly income of roughly LKR 35,000. The gap between mean and median shows how many workers sit near the minimum. Salary-aggregator sites publish much higher “average” figures built from self-reported professional salaries; they are not a benchmark for a compliant pay structure. For a specific role, use a survey from a Sri Lankan recruiter or professional body for that year.
Penalties for paying below the minimum wage
Paying less than the national minimum is an offence under section 9 of the 2016 Act, punishable on conviction before a Magistrate by a fine of up to LKR 25,000 or up to six months’ imprisonment, or both, with the arrears recoverable for the worker. Labour officers check payslips and wage registers during inspections, and the 2025 amendment gives the Commissioner General power to issue directives to principal employers about contractors’ workers. Under-payment also carries the EPF and ETF surcharges on the contributions that were never made.
Common mistakes
- Using the LKR 27,000 transitional figure, or an older figure from a foreign wage site, after 1 January 2026.
- Keeping “BRA” lines on the payslip and forgetting that the total must still reach LKR 30,000.
- Cutting an allowance to fund the increase, which section 4 of the 2025 amendment forbids.
- Paying EPF and ETF on basic only when fixed allowances are earnings.
- Setting a basic below the Wages Board minimum for the trade.
- Missing the quarterly stamp duty return for staff above LKR 25,000.
Do this automatically
Humanised checks every employee against the current minimum wage, calculates EPF, ETF and APIT on the right earnings base, and updates the statutory figures when the law changes. From LKR 10,000/month for up to 15 employees, no setup fee.
See payroll softwareFrequently asked questions
What is the minimum wage in Sri Lanka in 2026?
LKR 30,000 a month and LKR 1,200 a day from 1 January 2026, under the National Minimum Wage of Workers Act No. 3 of 2016 as amended by Act No. 11 of 2025. From 1 April to 31 December 2025 it was LKR 27,000 and LKR 1,080.
What is the minimum daily wage in Sri Lanka?
LKR 1,200 for each day worked from 1 January 2026.
Does the minimum wage include allowances?
The former Budgetary Relief Allowances are now part of the wage. Section 4 of the 2025 amendment forbids reducing any allowance to cancel the increase, so the LKR 30,000 must be a real floor on what the worker is paid.
Is the Budgetary Relief Allowance still payable in 2026?
Not as a separate allowance. Amendment Acts Nos. 9 and 10 of 2025 ended the 2005 and 2016 allowances on 31 March 2025 and the LKR 3,500 was consolidated into the minimum wage from 1 April 2025.
What is basic salary in Sri Lanka?
A payroll convention, not a legal definition: the fixed part of monthly pay before allowances, overtime and incentives. The Acts speak of wages, remuneration and earnings instead.
Is EPF calculated on basic salary or gross salary?
On total earnings as defined in section 47 of the EPF Act: wages plus cost-of-living and similar fixed allowances, holiday pay and the cash value of food. Overtime, reimbursements and bonuses are excluded.
Can an employer keep basic salary low and pay the rest as allowances?
It does not reduce EPF, ETF or APIT, because fixed allowances are earnings and all pay is taxable. It only affects calculations the employer runs by convention, and it is a common inspection finding.
Does the minimum wage apply to probationers and part-time staff?
Yes. The Act covers every worker in any industry or service from the first day; part-time and daily-paid workers must receive the daily minimum for each day worked.
What is the average salary in Sri Lanka?
The Department of Census and Statistics Labour Force Survey 2024 reports a mean monthly salary of about LKR 63,000 for men and LKR 51,700 for women, with a median of roughly LKR 35,000. Aggregator sites publish higher, self-reported figures.
What is the penalty for paying below the minimum wage?
An offence under section 9 of the 2016 Act: a fine of up to LKR 25,000 or up to six months’ imprisonment, or both, plus recovery of the arrears for the worker.
When did the minimum wage last increase in Sri Lanka?
On 1 January 2026, the second step of the 2025 amendment. Earlier increases took effect in April 2025, September 2024, August 2021 and 2016.
Related guides and tools
Sources. National Minimum Wage of Workers (Amendment) Act No. 11 of 2025 (Parliament of Sri Lanka); Budgetary Relief Allowance of Workers (Amendment) Act No. 9 of 2025; Budgetary Relief Allowance of Workers (Amendment) Act No. 10 of 2025; Ministry of Labour, how the private-sector minimum wage is set to rise (2025); National Minimum Wage of Workers Act No. 3 of 2016; Budgetary Relief Allowance of Workers Act No. 36 of 2005; Employees’ Provident Fund Act No. 15 of 1958, s.47 (definition of earnings); Department of Census and Statistics, Labour Force Survey Annual Report 2024. 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.