Sri Lankan Payroll Law Changes: 2026 Update
What changed in Sri Lankan payroll law in 2026: the minimum wage rise, the ETF e-payment cut-off, and what stayed the same. Dated, sourced list.
On this page
- What changed, and from when
- Minimum wage: LKR 30,000 a month from January 2026
- ETF: electronic payment is now the only option for larger employers
- APIT: no change so far in 2026
- EPF and ETF rates: unchanged
- Shop and Office Employees Act: no amendment in 2026
- Is a new employment bill coming?
- What each change means for your next pay run
- Keeping a compliance log your auditor accepts
- Frequently asked questions
- Did EPF or ETF percentages change in 2026?
- Did the APIT relief threshold change in 2026?
- Is the ETF electronic payment rule new?
- Is the new employment bill already law?
- Where do I check for the next change?
Last checked: 20 September 2026. Two things changed in 2026. The minimum wage went up. ETF electronic payment became compulsory, with no manual option left. APIT, EPF and ETF rates did not change. The Shop and Office Employees Act did not change either. Below is the dated list.
What changed, and from when
| Change | From | Instrument |
|---|---|---|
| Minimum wage LKR 30,000 a month, LKR 1,200 a day | 1 January 2026 | National Minimum Wage of Workers Act No. 3 of 2016 s.3(1)(b), as substituted by Act No. 11 of 2025 |
| ETF: no more cash, cheque or money order for employers with 15+ staff | The July 2026 contribution, due 31 August 2026 | ETF Board notice |
Minimum wage: LKR 30,000 a month from January 2026
The floor is now LKR 30,000 a month. It is LKR 1,200 for each day worked. It is the second step of a rise that started on 1 April 2025. That step set the floor at LKR 27,000 a month, or LKR 1,080 a day. The same April 2025 date also ended the old Budgetary Relief Allowance (BRA) as a separate line, under Acts No. 9 and No. 10 of 2025. The allowance amount was folded into the wage instead.
What this means for a pay run:
- Check every employee’s total pay reaches LKR 30,000 a month, or LKR 1,200 for each day worked.
- Do not shrink another allowance to pay for the rise. Section 4 of Act No. 11 of 2025 forbids this.
- Recheck EPF, ETF and overtime. They run on total monthly earnings, and those just moved up. Gratuity runs on the wage or salary last drawn.
See the minimum wage guide for the full history and worked examples.
ETF: electronic payment is now the only option for larger employers
Employers with 15 or more staff have had to pay ETF electronically since February 2023. From the July 2026 contribution, due 31 August 2026, a final cut-off applies. Cash, cheque and money order are no longer accepted from those employers. If your business still pays by cheque, and has 15 or more staff, that route is now closed. Move to a bank’s corporate portal or eservices.etfb.lk. See the ETF employer guide for the registration and payment steps.
APIT: no change so far in 2026
The IRD’s tax tables for the year of assessment 2025/26 are still the ones in force. They took effect on 1 April 2025. The first LKR 1,800,000 a year (LKR 150,000 a month) stays relief-free. After that, tax runs at 6%, 18%, 24%, 30% and 36% in bands. No 2026/27 table has been published as of 20 September 2026. Keep using the current tables until the IRD says otherwise. See the APIT employer guide for the full method, and How HRIS Systems Simplify Tax Table Updates and Help You Stay Compliant for the 1 April checklist.
EPF and ETF rates: unchanged
Employee EPF stays at 8%. Employer EPF stays at 12% of total monthly earnings. Employer-only ETF stays at 3%. Both are still due the last working day of the following month. The surcharge for late payment stays at 5% to 50%, depending on how late.
Shop and Office Employees Act: no amendment in 2026
The Act’s last amendment was Act No. 28 of 2024, on IT and BPO night work. No amendment to hours, leave, overtime or pay days was passed in 2025. None has passed so far in 2026 either.
Is a new employment bill coming?
A Ministry of Labour committee is drafting a single labour code. It would replace several existing Acts. It has not been enacted. No published draft was found on an official government source on 20 September 2026. It changes nothing in the 2026 payroll year so far. See Sri Lanka Employment Law Reform, What Is Changing for what is confirmed about it, and What is the minimum retirement age in Sri Lanka and what must an employer do? for a separate, already-settled rule.
What each change means for your next pay run
- Raise any employee below LKR 30,000 a month, or LKR 1,200 a day, to the floor. Do not cut another allowance to fund it.
- If you have 15 or more staff and still pay ETF manually, switch to electronic payment now.
- Leave your APIT tables, and your EPF and ETF percentages, as they are.
Keeping a compliance log your auditor accepts
Note the date, the change, and the instrument. The instrument is the Act, the amendment, or the Board notice. Note the date you applied it in payroll too. The table above is a starting point. Add a line each time the labour law map, or an employer guide, changes its “reviewed” date.
Do this automatically in Humanised. Payroll software in Sri Lanka calculates EPF, ETF and APIT from the rates in force. Plans start at LKR 10,000 a month for up to 15 staff. A free 7-day assisted trial, set up by the Humanised team on your own data, comes first.
This is general payroll guidance. Every case is different. For your own case, speak to a payroll practitioner or a lawyer.
Frequently asked questions
Did EPF or ETF percentages change in 2026?
No. Employee EPF is still 8%, employer EPF is 12%, and ETF is 3%. All three are on total monthly earnings.
Did the APIT relief threshold change in 2026?
No confirmed change as of 20 September 2026. The 2025/26 tables, with a LKR 1,800,000 a year relief, are still in force.
Is the ETF electronic payment rule new?
Not entirely. It has applied to employers with 15 or more staff since February 2023. The final cut-off is new: from the July 2026 contribution, the manual fallback is gone for those employers.
Is the new employment bill already law?
No. A committee is drafting a single labour code. It has not been enacted. No published draft was found on an official government source.
Where do I check for the next change?
The labour law map links to each detailed guide. Each guide states its own review date.
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