For any business operating in Sri Lanka, compliance with the Employees' Provident Fund (EPF) and Employees' Trust Fund (ETF) is mandatory. Failing to contribute correctly can lead to severe surcharges and legal issues.
This guide clarifies the rates and responsibilities for 2026.
What is EPF? (Employees' Provident Fund)
Established under Act No. 15 of 1958, the EPF is the largest social security scheme in Sri Lanka. It serves as a retirement fund for private sector employees.
- Employer Contribution: 12% of the employee's total earnings.
- Employee Contribution: 8% of total earnings (deducted from salary).
- Total: 20% credited to the employee's EPF account monthly.
Note: "Total Earnings" includes basic salary, cost of living allowance, and other fixed allowances. It excludes overtime usage (OT).
What is ETF? (Employees' Trust Fund)
Established under Act No. 46 of 1980, the ETF is distinct because it is funded entirely by the employer.
- Employer Contribution: 3% of the employee's total earnings.
- Employee Contribution: 0%.
- Benefits: ETF provides benefits not just at retirement, but also for heart surgery, kidney transplants, and housing loans during employment.
Summary of Contributions
| Fund | Employer Pays | Employee Pays | Total |
|---|---|---|---|
| EPF | 12% | 8% | 20% |
| ETF | 3% | 0% | 3% |
| Total Cost to Employer | 15% | - | - |
Calculating the Amounts
If an employee has a Gross Salary of LKR 100,000 (Basic + Fixed Allowances):
- EPF (Employer 12%): LKR 12,000
- EPF (Employee 8%): LKR 8,000 (Deducted from salary)
- ETF (Employer 3%): LKR 3,000
- Employee Take Home: 100,000 - 8,000 = LKR 92,000
- Total Company Cost: 100,000 + 12,000 + 3,000 = LKR 115,000
Deadlines and Penalties
Contributions must be paid to the Central Bank of Sri Lanka on or before the last working day of the following month.
Late Payment Surcharges:
- 1 day - 10 days late: 5% surcharge
- 10 days - 1 month late: 15% surcharge
- 1 - 3 months late: 30% surcharge
- 3 - 6 months late: 40% surcharge
- Over 6 months: 50% surcharge
Automate Your Calculations
Don't risk manual errors. Use our free tool to calculate these amounts instantly:
👉 Sri Lanka EPF/ETF Calculator
Ensure your business remains compliant and avoids unnecessary fines!