Global coverage
Employer of Record Sri Lanka
Hire staff and expand your business in Sri Lanka with our fully-managed EOR Service
How we can help
Unrivalled Employer of Record Service in Sri Lanka designed to expand your business seamlessly
Agility EOR delivers services for business’s looking for an Employer of Record in Sri Lanka. We help clients hire new employees or transfer existing employees into a fully-managed EOR service.
We appreciate that each situation and business is different. That is why our personal approach to Employer of Record Services in Sri Lanka takes care of all HR, payroll, recruitment and compliance head aches, and allows you to do what you love best – driving your business forward.
Employer of Record in Sri Lanka
A Brief Guide to Sri Lanka
Steeped in history and blessed with natural beauty, Sri Lanka is a captivating island nation situated off the southeastern coast of India. Known as the “Pearl of the Indian Ocean,” Sri Lanka is rich in cultural heritage and biodiversity, boasting lush green landscapes, serene beaches, and a variety of wildlife.
Category | Information |
Location | Off the southeastern coast of India |
Capital City | Sri Jayawardenepura Kotte |
Official Languages | Sinhala, Tamil |
Area | 65,610 sq km |
Population | Approx. 22 million |
Currency | Sri Lankan Rupee (LKR) |
Major Cities | Colombo, Kandy, Galle |
GDP | Approx. $84 billion |
Major Industries | Textiles and apparel, tea, rubber, and coconut production, telecommunications, insurance, and banking |
Business Culture
Business Culture in Sri Lanka
In Sri Lanka, the business culture values respect, courtesy, and building relationships. Meetings start with small talk as a way to establish rapport before getting into the business matter at hand. Punctuality is appreciated, although it is understood that the heavy traffic in urban areas can cause delays. Business attire tends to be formal, with men typically wearing suits and women often donning sarees or business suits. Business cards are exchanged after the initial introductions. It’s worth noting that decision-making can take time as it often involves several layers of management.
Payroll and Taxes
Payroll and Taxes in Sri Lanka
Employee Taxation
In Sri Lanka, income tax rates are progressive, with higher income levels subject to higher tax rates.
Taxable Income (LKR) | Tax Rate |
0 – 500,000 | 6% |
500,001 – 1,000,000 | 12% |
1,000,001 – 1,500,000 | 18% |
1,500,001 – 2,000,000 | 24% |
2,000,001 – 2,500,000 | 30% |
2,500,001 + | 36% |
Employer Taxation
Employers in Sri Lanka are also responsible for various employer costs, which may include:
Fund Type | Contribution |
Employer Provident Fund (EPF) | 12% |
Employee Trust Fund | 3% |
Pension and Healthcare
Sri Lanka Pensions
The Employees’ Provident Fund (EPF) and the Employees’ Trust Fund (ETF) are two key pension schemes in Sri Lanka. They are administered by the Department of Labour and the ETF Board respectively. The EPF scheme is mainly funded by a 20% contribution from the gross salary of employees, with 12% contributed by employers and 8% by employees. Meanwhile, the ETF scheme is solely funded by a 3% contribution from employers. Pensions are usually distributed monthly to retired employees or their dependants.
Healthcare in Sri Lanka
Healthcare in Sri Lanka is a mix of public and private systems. The public system is funded by the government and provides free healthcare services at the point of delivery, which includes general healthcare services, specialist consultations, and even surgeries. The system is administered by the Ministry of Health, which operates a network of clinics and hospitals across the country.
The private healthcare sector complements the public system, offering services at a cost. It is especially known for its quicker service and higher-end facilities. However, these services can be expensive and are typically accessed by the more affluent sections of society.
Quality of care in the public healthcare system can vary, with urban areas often having better facilities and more experienced doctors compared to rural areas. Regardless, Sri Lanka has made significant strides in healthcare, with indicators like life expectancy and infant mortality rates comparable to those in many developed countries.
Employment Law
Employment Law in Sri Lanka
Relevant Legislation: The primary governing legislation for employment law in Sri Lanka are the Shop and Office Employees Act (SOEA), the Wages Boards Ordinance, and the Industrial Disputes Act. These laws cover key aspects of employment relationships including contracts, wages, working hours, leave, and termination.
Employment Contracts: In Sri Lanka, both written and verbal employment contracts are recognized, but written contracts are highly recommended for clarity and security. Contracts typically include terms of employment, work responsibilities, compensation, leave entitlements, and termination procedures.
Working Hours: The standard working week in Sri Lanka is usually 45 hours, typically spread over 5.5 days, with Sunday being a rest day. The SOEA stipulates a maximum of 9 hours a day.
Leave: Mandatory leave requirements include annual leave, casual leave, sick leave, and maternity leave. The SOEA mandates a minimum of 14 days of annual leave, 7 days of casual leave, and 7 days of sick leave. Maternity leave provision is 12 weeks, of which at least 4 must be taken post childbirth.
Overtime: Overtime is any work performed beyond the stipulated 9-hour workday or 45-hour work week. The rate of overtime pay is one and a half times the regular rate of pay, and there is no specific legal limit on the amount of overtime a worker can perform.
Termination: Employees can be terminated due to misconduct, performance issues, or redundancy. The employer is required to conduct a proper inquiry, following the principles of natural justice, before terminating an employee.
Notice: Termination usually requires notice. The length of the notice period depends on the contract, but it’s typically one month. In lieu of notice, employers can offer payment equivalent to the wages the employee would have earned during the notice period.
Severance Pay: Severance pay is mandatory for employees who are terminated due to redundancy. The amount is determined by the number of years of service, with the minimum being 2.5 months’ wages for each year of service.
IMMIGRATION
Work Permits in Sri Lanka
Sri Lanka’s immigration system is handled by the Department of Immigration and Emigration, established under the Immigration and Emigration Act No. 20 of 1948. The department’s primary goal is to facilitate legal immigration while preserving the sovereignty of Sri Lanka and ensuring its security.
The immigration process in Sri Lanka starts with a visa application. There are several categories of visas based on the purpose of the visit, such as tourist visas, business visas, residence visas, and transit visas. The most common type of visa for people intending to work in Sri Lanka is the Residence Visa.
A Residence Visa allows a foreigner to stay and work in Sri Lanka for a long period and is issued under eight categories including employment. For an Employment Category Residence Visa, the applicant must have a job offer from a company or institution in Sri Lanka that’s approved by the government. This visa is initially issued for one year and can be extended annually for up to five years. The sponsoring company must also meet certain requirements, including proving that the job cannot be adequately filled by a local resident.
It’s crucial to note that all visas must be obtained before traveling to Sri Lanka. The visa application process involves providing detailed information about the individual and the purpose of the visit, as well as any supporting documents. This process has been simplified through the implementation of Electronic Travel Authorization (ETA), where certain visa types can be applied online.
Furthermore, obtaining a visa does not guarantee entry into Sri Lanka. The final decision is made by the Immigration Officer at the port of entry.
Foreign employees must also obtain clearance from the Ministry of Defense. The sponsoring company usually facilitates this process as part of the work permit application.
In a bid to attract more foreign investment and skilled professionals, the Sri Lankan government has also introduced the “Special Resident Guest Scheme.” This scheme allows foreigners and their families who meet certain eligibility criteria, such as business investors and professionals in key sectors, to obtain a 10-year multiple-entry visa.
Navigating immigration laws can be complex, but AgilityEOR’s expert knowledge and robust network in Sri Lanka can guide businesses through this intricate process, ensuring compliance with all local regulations.
Public Holidays
Sri Lanka Public Holidays
Holiday | Date |
New Year’s Day | January 1 |
Tamil Thai Pongal Day | January 14 |
Independence Day | February 4 |
Sinhala and Tamil New Year | April 13-14 |
May Day | May 1 |
Vesak Poya Day | Full moon in May (varies) |
Poson Poya Day | Full moon in June (varies) |
Eid al-Fitr | Varies |
Eid al-Adha | Varies |
Deepavali | October/November (varies) |
Christmas Day | December 25 |
Wondering if expanding
in Sri Lanka is right for you?
Read on or speak to a member of our team now
The Benefits
Sri Lanka Employer of Record Benefits
When you choose Agility EOR to expand in Sri Lanka, we guarantee an Employer of Record Service tailored to the needs of your business
Compliance
We are on top of regulatory changes in Sri Lanka so you can relax.
Cost reduction
Allow our economies of scale to work in your favour.
High Service Levels
You and your employees have a dedicated account manager.
Fixed Cost Pricing
We will agree our professional fees up front based on your needs - no nasty surprises!
Consolidated Invoicing & Payments
Make one monthly payment to cover all your tax, social and wages costs from one to one thousand employees.
Fast delivery
You can have 'boots on the ground' within days on our infrastructure.
Reduced Risk
All wage taxes are remitted in full to the Sri Lankan authorities by professionals ensuring liabilities are met, giving you peace of mind.
Supply Chain Transparency
We only pay employees through local full employed solutions meaning Sri Lanka payroll tax is paid on all funds.
Save Time and Money
Our expertise is at your disposal. The need for you to have internal HR, Payroll and admin staff is eliminated.