EPF and ETF Late Payment Surcharge Rates
EPF and ETF surcharges run from 5% to 50% of contribution, rising with delay length. Both bands, worked example and how to fix missed months.
On this page
- When is each fund due?
- EPF surcharge bands
- ETF surcharge bands
- Who can be held personally liable?
- Worked example on a LKR 500,000 monthly contribution
- Can a surcharge be waived or appealed?
- How to fix a missed month without making it worse
- Do this automatically in Humanised
- Frequently asked questions
- What is the EPF surcharge rate in Sri Lanka?
- What is the ETF surcharge rate in Sri Lanka?
- Who pays the surcharge if I outsource payroll to an accountant?
- Does the surcharge apply per employee or on the whole contribution?
- Can the surcharge be reduced if I pay part of the amount on time?
- Is there a penalty beyond the surcharge for repeated late payment?
A surcharge applies to any EPF or ETF contribution not paid on time. EPF is due before the last working day of the following month. ETF is due on or before that day. It rises in bands. A delay of up to 10 days costs 5% of the contribution. A delay of more than 12 months costs 50%. The same scale applies to both funds.
When is each fund due?
EPF is due before the last working day of the month after the pay month (EPF Act s.10). ETF is due on or before that same day (ETF Act s.16(1)). Pay both before that day and you meet both rules. For September pay, pay before the last working day of October. A payroll calendar can track both funds against the same date each month.
Source: EPF employer guide; ETF employer guide.
EPF surcharge bands
| Delay after the due date | Surcharge on the contribution |
|---|---|
| 1 to 10 days | 5% |
| 11 days to 1 month | 15% |
| 1 to 3 months | 20% |
| 3 to 6 months | 30% |
| 6 to 12 months | 40% |
| More than 12 months | 50% |
Source: EPF Act No. 15 of 1958 s.16; EPF employer guide; confirmed against epf.lk employer FAQ, checked 20 September 2026.
ETF surcharge bands
| Delay after the due date | Surcharge on the contribution |
|---|---|
| Up to 10 days | 5% |
| 11 days to 1 month | 15% |
| 1 to 3 months | 20% |
| 3 to 6 months | 30% |
| 6 to 12 months | 40% |
| More than 12 months | 50% |
Source: ETF Act No. 46 of 1980 s.27; ETF employer guide; confirmed against etfb.lk payment of contributions page, checked 20 September 2026.
The two scales match band-for-band. That is why one missed transfer usually produces matching-percentage surcharges on both funds.
Who can be held personally liable?
The employer carries the liability. That is the person or company the EPF and ETF Acts address. It stays with the employer even when payroll is outsourced to an accountant or a bureau. Beyond the surcharge, failure to pay EPF is an offence under section 37 of the EPF Act. It is punishable on conviction by a fine or imprisonment, and arrears are recoverable through the Magistrate’s Court. A payroll service agreement can set out who does the calculating and who pays whom. But it cannot move the statutory duty away from the employer of record.
Worked example on a LKR 500,000 monthly contribution
An employer’s combined EPF contribution (employee 8% plus employer 12%, so 20% of earnings) for a month comes to LKR 500,000. It is paid 25 days late, inside the “11 days to 1 month” band:
| Item | Amount |
|---|---|
| Contribution due | LKR 500,000 |
| Delay | 25 days (11 days to 1 month band) |
| Surcharge rate | 15% |
| Surcharge payable | LKR 75,000 |
| Total now due | LKR 575,000 |
Take the same delay on an ETF contribution of, say, LKR 75,000 (3% of the same earnings base). It attracts the same 15% band: LKR 11,250 surcharge, LKR 86,250 total.
Source: EPF and ETF surcharge bands above; rates from the EPF employer guide and ETF employer guide.
Can a surcharge be waived or appealed?
The EPF Act lets the Commissioner accept that a delay was beyond the employer’s control. If so, the surcharge is not imposed. This is decided on the facts submitted, not automatically. A delay can be genuinely outside your control, such as a bank system failure on the due date. If that happens, write to the relevant office with evidence as soon as the payment is made. Do not wait for a surcharge notice to arrive. Do not assume a waiver will be granted. Budget for the surcharge until it is confirmed otherwise.
How to fix a missed month without making it worse
- Pay the outstanding contribution as soon as it is found. The surcharge band is fixed by the length of delay to the payment date. Waiting longer only moves you into a higher band.
- Pay EPF and ETF together if both were missed. Do not pay one and leave the other, since each builds up its own surcharge separately.
- Quote the surcharge notice number, where one has been issued, when you pay online.
- Record what caused the delay and what has changed in your process. This helps if the same month is questioned later, or if a waiver request is worth making.
Do this automatically in Humanised
Missed deadlines are almost always a calendar problem. Sri Lankan payroll software calculates the EPF and ETF totals in the same pay run, so the figures are ready well before the last working day.
This is general payroll guidance. Every case is different. For your own case, speak to a payroll practitioner or a lawyer.
Frequently asked questions
What is the EPF surcharge rate in Sri Lanka?
It runs from 5% of the unpaid contribution for a delay of up to 10 days. It rises in bands to 50% for a delay of more than 12 months. The bands are set out in the table above.
What is the ETF surcharge rate in Sri Lanka?
The same scale as EPF: 5% up to 10 days late, rising to 50% for delays over 12 months.
Who pays the surcharge if I outsource payroll to an accountant?
The employer stays liable under the EPF and ETF Acts, regardless of any payroll service agreement. Your agreement with the accountant can set out who reimburses a surcharge caused by their error. But it does not change who the funds pursue first.
Does the surcharge apply per employee or on the whole contribution?
It applies to the total contribution for the month that was paid late, not per employee. A single delayed payment covering all staff attracts one surcharge, calculated on that total.
Can the surcharge be reduced if I pay part of the amount on time?
The unpaid balance is what attracts the surcharge, calculated for the length of time that balance stayed outstanding. Paying part on time reduces the base the surcharge is calculated on. The month is still technically late for the shortfall.
Is there a penalty beyond the surcharge for repeated late payment?
Yes. Non-payment is also an offence under the EPF Act, separate from the surcharge. It can lead to prosecution and recovery of arrears through the courts. Persistent late payment is also something a Labour Office inspection is likely to flag.
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