EPF and ETF in Sri Lanka 2026: rates, deadlines and examples

Last verified against the primary sources on 15 October 2026.

Updated 23 October 2026: merged in our EPF ETF calculator guide (where the 15 employees figure comes from, rechecked against the ETF Board notice and payment page, and a 20 employee example); that guide now redirects here.

Take a hypothetical supermarket that pays 40 cashiers a night-shift allowance of Rs 5,000 every month and leaves it out of the EPF calculation. Whether that allowance belongs in the EPF and ETF base depends on what it actually pays for, not on its name. If it is in substance part of pay, every month it was left out is an underpayment, and each month carries its own surcharge.

To work out the amounts for one employee, use our EPF and ETF calculator.

The rates have not changed in 2026, but the base and the payment date are where employers go wrong. Late contributions carry a surcharge of up to 50 percent [1] [2], and from July 2026 contributions, employers with 15 or more employees must pay ETF and send ETF returns electronically [3]. This guide gives the 2026 working numbers, the deadlines, the surcharge ladder and the common errors.

EPF and ETF in plain terms

The Employees' Provident Fund (EPF) is the mandatory retirement savings scheme under the EPF Act No. 15 of 1958. Employers register and deal with the Department of Labour, which runs registration through its Labour Offices under the Commissioner of Labour, and the fund itself is managed by the EPF Department of the Central Bank of Sri Lanka [4].

The Employees' Trust Fund (ETF) is a separate fund under the ETF Act No. 46 of 1980, run by the ETF Board and paid for by the employer alone [2].

Who is covered

"an employer having even one employee is legally bound to pay contributions to EPF" [4]. There is no headcount threshold, no minimum earnings and no minimum hours. The EPF Act covers a person who works under a contract with an employer "in any capacity", including a contract of service or a contract personally to execute any work or labour [1]. Calling someone a consultant does not take them out; see consultant or employee: the misclassification risk.

The EPF Department lists narrow exemptions: social service organisations providing technical training for minor offenders, the destitute, and deaf and blind people; a charity with fewer than ten employees; and household employees [4].

Where the "15 employees" figure comes from

The number 15 does not decide whether EPF or ETF applies: both apply from the first employee. It comes from the ETF rules on electronic payment. Under the regulation in Gazette Extraordinary 2311/39 of 22 December 2022, made under section 43 of the ETF Act, every employer with 15 or more employees must pay ETF and send ETF returns electronically; the ETF Board gives 1 February 2023 as the start date [6]. Its April 2026 notice adds that from contributions for July 2026 (due by 31 August 2026) it no longer accepts cheques, money orders, cash or manual returns from those employers [3]. An employer with fewer than 15 employees still pays ETF every month; only the electronic route is not compulsory for it.

2026 contribution rates

EPF is 8 percent from the employee and 12 percent from the employer of total earnings (EPF Act s.10) [1]; ETF is 3 percent from the employer (ETF Act s.16) [2]. So the employer pays over 23 percent of each employee's earnings every month: 15 percent from its own pocket and 8 percent deducted from pay.

What counts as earnings

"Earnings" in section 47 of the EPF Act include wages, salary or fees, cost of living and similar allowances, holiday pay and food or its cash value [1].

Outside the base:

• Overtime payments, according to the EPF Department's FAQ (Department guidance, not the Act) [10]
• Bonuses and incentive payments, according to the same FAQ [10]
• Genuine reimbursements of actual expenses

Fixed allowances (transport, housing, shift) are the grey area. The test is what the allowance pays for: an allowance that is really part of the wage belongs in the base; a payment that reimburses a real cost does not. Decide each allowance once, keep a note of the reason, and apply the decision the same way every month.

Monthly deadlines

Both Acts make the month's contributions due by the last day of the following month (EPF Act s.10, ETF Act s.16) [1] [2]. The EPF Department and the ETF Board both ask for payment "on or before the last working day" of the following month [5] [6], so treat the last working day as the deadline. There is no 15th or 20th due date for EPF or ETF.

• March 2026 payroll: pay by Thursday 30 April 2026
• April 2026 payroll: pay by Friday 29 May 2026 (31 May 2026 was a Sunday and 30 May a Saturday)
• May 2026 payroll: pay by Tuesday 30 June 2026

Check for public holidays at the month end, and do not leave payment to the last hour: bank settlement is not always instant.

Surcharge for late payment

Late EPF and ETF contributions carry a surcharge on the contributions due, set by how late the payment is, not a flat rate. Section 16 of the EPF Act and section 27 of the ETF Act set the same ladder [1] [2]:

The surcharge applies unless the employer shows that the delay was caused by circumstances beyond its control [1] [2]. Separately, section 37A of the ETF Act adds 1 percent of the contribution for each month or part of a month that an ETF return is late [2] [6], and the EPF Department charges 2 percent of the total payment where Form C or the upload file has incomplete details [5]. EPF dues are not subject to the Prescription Ordinance (EPF Act s.17(3)), so old months do not drop away [1].

The cost rises fast. A Rs 200,000 monthly EPF and ETF payment made two months late falls in the 20 percent band and becomes Rs 240,000. Even 11 days late costs 15 percent, Rs 30,000.

Registration and new employees

EPF. The employer registers on Form D, filled in duplicate, certified and sent by registered post to the nearest Labour Office or the Commissioner of Labour, "within 14 days of the recruitment of the first employee" [4]. The regulations set the same limit as two weeks from the date the employer becomes liable to contribute [7]. The employer number starts with two letters for the district. Our EPF employer registration guide has the steps.

ETF. "Unlike EPF, ETF has no registration procedure prior to making contributions." It uses the EPF number, or a temporary number from the ETF Board until that is issued [6].

New employees. Give each new employee Forms A, B and H and register them with the Labour Department [4], and put them on the Form C for the month of recruitment with details as on the NIC. Assign member numbers in order and never reuse one [5].

Monthly returns and payment routes

• EPF Form C. Paper Form C in triplicate is allowed for employers with fewer than 50 employees; 50 or more must file electronically [5].
• ETF electronic payment. Under the regulation in Gazette 2311/39, employers with 15 or more employees must pay ETF and send returns electronically. The ETF Board enforces it from July 2026 contributions, due by 31 August 2026; from then cheques, money orders, cash and manual returns are not accepted [3].
• ETF forms. R1 for larger employers and government bodies, R4 for those with fewer than 15 employees. Member details go on the half-yearly Form II: January to June by 31 August, July to December by 28 February [6].

Returns and payments go under the employer's EPF registration number [6]. The monthly payment procedures guide sets out the full sequence.

Worked examples

These examples assume the whole salary is EPF and ETF earnings.

Example 1. Rs 80,000 a month

Example 2. Rs 250,000 a month

At this salary APIT also applies; see the APIT deduction guide.

Example 3. A 25-employee business

Monthly earnings of Rs 3,000,000 across 25 staff:

• EPF: Rs 600,000 (20% of 3,000,000)
• ETF: Rs 90,000 (3% of 3,000,000)
• Combined: Rs 690,000 a month
• For the year: Rs 8,280,000

With 25 employees, ETF must be paid electronically [3]. Build the amount into the cash-flow forecast. Our EPF calculator and salary calculator give a quick figure to check against before the bank file goes out.

Example 4. A 20-employee business

Total earnings for the month of Rs 2,400,000 across 20 staff. This example splits the employer's own cost from what it pays over.

The employer pays Rs 480,000 to EPF and Rs 72,000 to ETF, electronically because it has 15 or more employees [3], and pays net salaries after the Rs 192,000 employee deduction.

EPF withdrawals: what employees can and cannot claim

Resignation alone does not release the EPF balance. The EPF Department's refund grounds include reaching 55 (men) or 50 (women) on leaving employment, marriage for women, total incapacity, permanent emigration and listed public-sector cases [8]. Before retirement, a member can draw up to 30 percent of the balance as a pre-retirement benefit for housing or medical purposes, subject to conditions that include at least ten years of contributions and a balance above Rs 300,000 [9].

Five common EPF and ETF mistakes

1. Not deciding the allowance question

Fixed allowances paid every month are the usual source of underpayment. Fix: for each allowance, record what it pays for and whether it is in the base, then apply that every month. If it is really a reimbursement, pay it against receipts.

2. Late onboarding of new hires

EPF and ETF are due from the first month of employment. There is no probation grace period. Fix: make EPF and ETF part of the day-one HR checklist; our payroll setup checklist for new employers covers it.

3. Paying without the schedule

Paying the bank is not the same as filing the schedule. The EPF Form C and the ETF Form II tie each employee to the money; without them, member accounts are not updated, and a late Form II carries its own 1 percent a month [6]. Fix: treat the schedule submission as part of the deadline.

4. Not checking employees' annual statements

Ask employees to check their annual EPF statement each year and confirm it in writing. Errors caught early are easy to correct; errors found at retirement are hard to backfill.

5. Getting the leaver month wrong

If an employee leaves on the 15th, EPF and ETF are due on the earnings actually paid that month, not zeroed and not on a different base. Contributions stop from the following month. Fix: confirm leaver-month contributions before the cut-off.

Talk to us. If you want your EPF and ETF base, deadlines and returns checked before the next payment, our payroll team can go through them 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. Central Bank of Sri Lanka. Employees' Provident Fund Act, No. 15 of 1958 (reprint), ss.10, 16, 17(3) and 47. https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/laws/acts/en/epf_act.pdf . Primary. Accessed 15 October 2026.

1. Employees' Trust Fund Board. Employees' Trust Fund Act, No. 46 of 1980, ss.16, 27 and 37A. https://etfb.lk/wp-content/uploads/2021/03/ETF-Act.pdf . Primary. Accessed 15 October 2026.

1. Employees' Trust Fund Board. Notice: mandatory electronic payment of contributions (April 2026), citing Gazette 2311/39 of 22 December 2022. https://etfb.lk/wp-content/uploads/2026/04/NOTICE-Mandatory-Electronic-Payment-English.pdf . Primary. Accessed 15 October 2026.

1. EPF Department, Central Bank of Sri Lanka. Employer registration and exemptions web page. https://epf.lk/?p=163 . Primary. Accessed 15 October 2026.

1. EPF Department, Central Bank of Sri Lanka. Remitting contributions web page: due date, Form C, e-returns, surcharges, member numbers. https://epf.lk/?p=171 . Primary. Accessed 15 October 2026.

1. Employees' Trust Fund Board. Payment of contributions web page. https://etfb.lk/payment-of-contributions/ . Primary. Accessed 15 October 2026.

1. Department of Labour. Employees' Provident Fund Regulations, 1958, regulation 8 (Form D within two weeks of becoming liable). https://labourdept.gov.lk/downloads/labour_code/48.pdf . Primary. Accessed 15 October 2026.

1. EPF Department, Central Bank of Sri Lanka. Refund of member balances web page. https://epf.lk/?p=218 . Primary. Accessed 15 October 2026.

1. EPF Department, Central Bank of Sri Lanka. Pre-retirement benefits web page. https://epf.lk/?page_id=756 . Primary. Accessed 15 October 2026.

1. EPF Department, Central Bank of Sri Lanka. FAQs for Employers, questions 3 and 4 (components included in and excluded from total earnings). https://epf.lk/?page_id=811 . Administrative guidance. Accessed 22 October 2026.