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EPF and ETF in Sri Lanka — Complete Guide (2025)

The Employees' Provident Fund (EPF) and Employees' Trust Fund (ETF) are mandatory retirement savings schemes for private sector employees in Sri Lanka. Every employer with at least one employee is legally required to register and make monthly contributions under the EPF Act No. 15 of 1958 and ETF Act No. 46 of 1980.

EPF Contribution Rates in Sri Lanka

EPF contributions are calculated as a percentage of the employee's gross monthly salary:

• Employee contribution: 8% — deducted from the employee's gross salary each month
• Employer contribution: 12% — additional cost borne by the employer, not deducted from salary
• Total EPF: 20% of gross salary deposited monthly into the EPF account

The combined 20% is remitted by the employer to the Central Bank of Sri Lanka by the last working day of the following month.

ETF Contribution Rates in Sri Lanka

Unlike EPF, the ETF is contributed entirely by the employer at 3% of gross salary. Employees do not make any ETF contributions from their own pay. ETF is managed by the Employees' Trust Fund Board and provides a lump-sum benefit payable at retirement, resignation, death, or permanent disability.

How EPF is Calculated — Step-by-Step Example

For an employee with a gross monthly salary of LKR 100,000:

1. Employee EPF: 100,000 × 8% = LKR 8,000 (deducted from salary)
2. Employer EPF: 100,000 × 12% = LKR 12,000 (paid by employer)
3. Employer ETF: 100,000 × 3% = LKR 3,000 (paid by employer)
4. Employee take-home: 100,000 − 8,000 = LKR 92,000
5. Total employer cost: 100,000 + 12,000 + 3,000 = LKR 115,000

EPF Interest Rate in Sri Lanka

The EPF interest rate is declared annually by the Monetary Board of Sri Lanka. The rate for 2023 was 9% per annum, credited to member accounts at year end. This makes EPF one of the highest-yielding guaranteed savings instruments available to Sri Lankan workers.

Frequently Asked Questions

Is EPF deductible from taxable income in Sri Lanka?

Yes. The employee's EPF contribution (8% of gross salary) is deductible when calculating APIT (Advance Personal Income Tax). This means your taxable income for APIT purposes is calculated on your salary after deducting EPF. Use our Income Tax (APIT) Calculator to calculate your full tax position including EPF.

What happens to my EPF if I change jobs?

Your EPF balance remains in your account with the Central Bank of Sri Lanka. Your new employer will create a new EPF account (or you can link to the same member number). You can check your EPF balance online at the EPF member portal.

Do EPF contributions apply to bonuses and overtime?

EPF contributions apply to the total remuneration paid by the employer, including basic salary, cost-of-living allowances, and overtime. However, certain discretionary payments like ex-gratia bonuses may be excluded. Consult the EPF Department for specific rulings.

Are domestic workers covered under EPF in Sri Lanka?

Domestic workers (household employees) are generally not covered under the standard EPF Act. However, employers may voluntarily register them. Most EPF coverage applies to commercial and industrial employers.