APIT registration guide for Sri Lankan employers (formerly PAYE)

Last verified against the primary sources on 15 October 2026.

Your new hire starts next Monday on Rs 220,000 a month. APIT (Advance Personal Income Tax) on that salary is Rs 4,200 a month on Table 01 (6% × 220,000 less 9,000) [1]. If you miss the deduction, you still owe the tax, as if you had withheld it (s.86(3)), and you are left recovering it from the employee (s.86(6)) [2]. Deduction of APIT has been mandatory for employers since 1 January 2023 [3].

This guide covers what registration means, who needs it, the e-Services steps, and the duties that follow. The IRD's website still labels some pages and file groups "PAYE" (Pay As You Earn, the old name for the scheme) or "PAYE/APIT"; they are the current APIT material.

1) What APIT registration does

Registration adds the employment-income withholding tax type to your existing taxpayer profile on IRD e-Services, so you can pay APIT each month and file the annual statement. It needs:

• a TIN for the business (see our TIN certificate guide)
• a PIN for IRD e-Services
• a current email address on the IRD's records
• the person or tax agent who will act for the business

The IRD's registration guidelines say that "No supporting documents are required for tax types other than VAT" [4]. Where a tax type already exists on your profile but is inactive, activation needs a "Letter of request confirming liability" [4].

If the company cannot yet access e-Services, resolve the director TIN and first-login authorisation steps before attempting the employer registration.

2) APIT and PAYE

PAYE was the earlier scheme for deducting tax from salaries. APIT is the current one: the employer withholds it under section 83A of the Inland Revenue Act No. 24 of 2017, and it is credited against the employee's tax for the year [2]. From 1 April 2025 the monthly tax-free amount is Rs 150,000 (Rs 1,800,000 a year) [1]. Our PAYE vs APIT guide covers the differences.

3) Who needs the APIT tax type

The Act and the IRD guidance we read set no separate registration threshold. The IRD's guidelines list other tax types for "Those who are liable to register" [4]. In practice, you need the APIT tax type once any employee's pay attracts APIT, and when you file the annual statement, staff below the threshold are listed in Schedule 03 [5].

Late registration does not change what you owe. The employer must pay the tax that should have been withheld (s.86(3)) [2].

Employers include companies, partnerships, sole proprietors who employ staff, NGOs and clubs with salaried staff, and any other person paying employment income.

What counts as employment income

Table 01 covers regular employment income payable in a month [1]:

• Basic salary or wages
• Cost of living allowance and fixed allowances (transport, housing, meals, food)
• Overtime
• Commission
• Benefits in kind such as accommodation or a company vehicle, at their value
• Housing, conveyance, electricity, telephone and entertainment costs the employer pays
• Medical bills and insurance premiums the employer pays, except dental, medical or health insurance reimbursed on equal terms to all full-time employees

Bonuses and incentives are employment income too, but they are taxed through Table 02, not added to monthly pay [6]. Gratuity and other once-and-for-all terminal payments are not regular monthly pay; they go through Table 03 [7].

Kept out of monthly pay

• Reimbursement of actual expenses incurred on official duty
• The employer's own EPF (12 percent) and ETF (3 percent) contributions

Only the exemptions in the Third Schedule to the Act apply to employment income [1].

4) When to register

Register before the first payroll on which APIT is due:

• when you hire someone whose regular pay will exceed Rs 150,000 a month
• when a pay rise takes an existing employee over Rs 150,000
• when you begin paying any employment income that attracts APIT

APIT for a month is due within fifteen days after the month ends (s.86(1)) [2], so a registration still pending on the 15th leaves you paying late.

5) Registering on IRD e-Services

Step 1. TIN. The business needs its own TIN first. Since Act No. 11 of 2026, a company must obtain one within thirty days of incorporation [8].

Step 2. PIN. If you do not have a PIN for e-Services, request one; the IRD's quick guide "Obtaining a PIN" sets out the screens [9].

Step 3. Profile details. Make sure your registered details, including the email address, are current. The IRD's guidelines say registration details should be updated before applying for tax type updates, using its quick guide "How to change Taxpayer Profile Information" [4].

Step 4. Log in. Go to Access to e-Services on the IRD website and log in with the TIN and PIN [10].

Step 5. Register the tax type. Follow the IRD's quick guide "How to Register for a Tax Type" through the e-Services screens and select the employment-income withholding tax type, which may be labelled PAYE/APIT [4]. Enter the date from which it should run. No supporting documents are required for tax types other than VAT [4].

Step 6. Keep the acknowledgement. Save the acknowledgement and, once the tax type shows as active on your profile, keep a copy in the payroll standing file.

If anything is unclear, the IRD Call Centre is on 1944 [4].

6) After registration: the monthly cycle

1. Calculate each employee's regular pay and apply the right table: Table 01, Table 05 for employees who join or retire during the year, Table 07 for second jobs [11]
2. Run bonuses through Table 02 and terminal payments through Table 03
3. Show the deduction on the payslip
4. Pay the month's APIT within fifteen days after the month ends [2]
5. Keep the payroll file, payment proof and employee workings together

Late payment adds a penalty of 20 percent of the tax due but not paid under section 179(1) if the tax is still unpaid fourteen days after the due date [2] [12], plus interest at 1.5 percent a month or part of a month under section 159(1) [2]. A late income tax instalment carries 10 percent under section 179(2) instead [2]. Calculation details are in the APIT deduction guide.

7) The annual statement

By 30 April, file the Annual Statement of Employer for the year to 31 March, "within thirty days after the end of each year ending on the thirty first day of March" (s.86(2)) [2]. E-filing is mandatory for all employers [5]. The schedules are [5]:

• Schedule 01: employees whose APIT was deducted on remuneration other than once-and-for-all payments; each employee's TIN is mandatory
• Schedule 02: once-and-for-all payments (terminal benefits) only
• Schedule 03: employees not taxed because they were below the monthly or yearly threshold, with their TIN where they have one

The T-10 is the separate certificate of tax deductions you give each employee, and a leaver must receive it within 30 days after the employment ends (s.87(4)(b)) [2]. Under new s.178A, a withholding agent that does not follow the procedures, formats and forms the Commissioner-General specifies for the statement (new s.86(9)), and does not comply within 14 days of a warning notice, is liable to a penalty of up to Rs 200,000 a year of assessment [8]. Not filing the statement at all is an offence under new s.185A, with a fine of up to Rs 400,000, imprisonment of up to six months, or both [8]. See the APIT return filing guide.

8) Updating or ending the registration

If the business name, address, contact person or structure changes, update the taxpayer profile on e-Services, following the IRD's quick guide "How to change Taxpayer Profile Information" [4]. If you stop having employees whose pay attracts APIT, settle every month's APIT and file the annual statement before you ask the IRD about deactivating the tax type.

9) Common registration failures

• Starting the tax type request before the TIN, PIN and registered email are current
• Treating the PAYE and APIT labels on the IRD site as two different regimes
• Registering after the first payroll on which APIT was due
• Activating the tax type but not naming a monthly payroll owner

Frequently asked questions

When did APIT become mandatory?

Deduction of APIT has been mandatory since 1 January 2023 [3].

What is the current monthly APIT threshold?

Rs 150,000 a month, or Rs 1,800,000 a year [1].

Do I need documents to register the APIT tax type?

The IRD's guidelines say no supporting documents are required for tax types other than VAT; activating an inactive tax type needs a letter of request confirming liability [4].

Can I deduct less APIT if the employee asks?

No. The deduction follows the IRD tax tables, and any shortfall is yours to pay (s.86(3)) [2].

What if I forget to deduct APIT in a month?

You must pay the tax as if you had withheld it, and you may recover it from the employee (s.86(3) and (6)) [2]. Recovering it in the next payroll is easier than a year later.

Is overtime included?

Yes. Overtime is regular employment income on Table 01 [1].

What if an employee has more than one employer?

The secondary employer applies Table 07: a rate set by the employee's declared primary employment income, or 36 percent if the employee has not disclosed it [11].

Is there APIT on gratuity and terminal benefits?

Yes, under Table 03, not the monthly table. Where gratuity and similar payments exceed Rs 5,000,000, 12 percent of the excess is retained for approved schemes and 36 percent for unapproved ones [7].

Talk to us. If you are taking on staff and want APIT set up before the first payroll, our payroll team can work through it with you; book a consultation at our contact page.

This guide is general information on the law as at 15 October 2026 and is not advice on your specific situation.

References

1. Inland Revenue Department. APIT Tax Table 01, Y/A 2025/26, instructions, paras 01 to 03 and 07. https://www.ird.gov.lk/en/publications/APIT_Tax_Tables/2025-2026/Table%20-%201/02.%20APIT_2526_Table_01_Text.pdf . Primary. Accessed 15 October 2026.

1. Inland Revenue Department. Inland Revenue Act, No. 24 of 2017, consolidated, ss.83A, 86(1) to (3) and (6), 87(4), 159(1) and 179. https://www.ird.gov.lk/en/publications/Acts_Income%20Tax_2017/IRA_Cons_Act_-_2025_Changes.pdf . Primary. Accessed 15 October 2026.

1. Inland Revenue Department. Public notice PN/IT/2022-03 (15 December 2022), para 1. https://www.ird.gov.lk/en/Lists/Latest%20News%20%20Notices/Attachments/479/PN_IT_2022-03_15122022_E.pdf . Primary. Accessed 15 October 2026.

1. Inland Revenue Department. Taxpayer Guidelines for Registration and Update (2026), tax type registration, activation and profile updates. https://www.ird.gov.lk/en/Downloads/SiteAssets/TPR_Guidelines_2026_E.pdf . Primary. Accessed 15 October 2026.

1. Inland Revenue Department. Instructions to complete the APIT Annual Statement, Y/A 2025/2026, e-filing and Schedules 01 to 03. https://www.ird.gov.lk/en/Downloads/Other_PAYE_Doc/Asmt_APIT_Guide_2025_2026_E.pdf . Primary. Accessed 15 October 2026.

1. Inland Revenue Department. APIT Tax Table 02, Y/A 2025/26, instructions. https://www.ird.gov.lk/en/publications/APIT_Tax_Tables/2025-2026/Table%20-%202/03.%20APIT_2526_Table_02_Text.pdf . Primary. Accessed 15 October 2026.

1. Inland Revenue Department. APIT Tax Table 03, Y/A 2025/26, once-and-for-all payments. https://www.ird.gov.lk/en/publications/APIT_Tax_Tables/2025-2026/Table%20-%203/04.%20APIT_2526_Table_03_Text.pdf . Primary. Accessed 15 October 2026.

1. Parliament of Sri Lanka. Inland Revenue (Amendment) Act, No. 11 of 2026, TIN within thirty days of incorporation (s.102(1A)), new ss.86(9), 178A and 185A. https://www.ird.gov.lk/en/publications/Acts_Income%20Tax_2017/IR_Act_No_11-2026_E.pdf . Primary. Accessed 15 October 2026.

1. Inland Revenue Department. e-Services quick guide: Obtaining a PIN (v0.12). https://www.ird.gov.lk/en/eServices/Lists/Registration/Attachments/2/Obtaining%20a%20PIN%20v0%2012.pdf . Primary. Accessed 15 October 2026.

1. Inland Revenue Department. Access to e-Services web page. https://www.ird.gov.lk/en/eServices/SitePages/Access%20To%20e-Services.aspx?menuid=1803 . Primary. Accessed 15 October 2026.

1. Inland Revenue Department. APIT Tax Table 07, Y/A 2025/26, instructions and Table 7.1. https://www.ird.gov.lk/en/publications/APIT_Tax_Tables/2025-2026/Table%20-%207/08.%20APIT_2526_Table_07_Text.pdf . Primary. Accessed 15 October 2026.

1. Inland Revenue Department. Guide to the Return of Income Tax, Y/A 2025/26, Section 09, penalty of 20 percent of tax due but not paid, 10 percent on a late instalment, interest at 1.5 percent a month or part of a month. https://www.ird.gov.lk/en/Downloads/IT_Individuals_Doc/Asmt_IIT_004_2025_2026_E.pdf . Primary. Accessed 15 October 2026.