Minimum wage in Sri Lanka 2026: national rates, sector differences, and employer compliance obligations

Last verified against the primary sources on 15 October 2026.

Every private sector employer in Sri Lanka must pay at least the national minimum wage. From 1 January 2026 that is Rs 30,000 a month or Rs 1,200 a day, under the National Minimum Wage of Workers (Amendment) Act No. 11 of 2025 [1]. In trades covered by a Wages Board, the sector decision may set more, and the higher figure applies.

Underpaying exposes the company to Labour Department inspection and claims for arrears. This guide covers the current rate, what happened to the budgetary relief allowance, Wages Boards, overtime and EPF and ETF.

The legal framework: National Minimum Wage Act and Wages Boards

The National Minimum Wage of Workers Act No. 3 of 2016 sets a national floor for private sector workers. The current figures are written into the Act by the Amendment Act No. 11 of 2025, certified on 23 July 2025 and deemed operative from 1 April 2025 [1].

Wages Boards are set up under the Wages Boards Ordinance for specific trades. Each board's decision sets minimum wages and other conditions for its trade, published in the Gazette. Where a Wages Board decision covers a worker, apply the higher of the national minimum and the sector rate.

If you are a Colombo office or technology company, the national minimum usually governs unless a Wages Board covers your trade. If you run a factory, a hotel or an estate, check for a Wages Board decision for your trade before setting pay.

Check the wage change alongside the wider employer-law update so that payroll changes do not overlook other employment obligations.

Current national minimum wage rate

Source: Act No. 11 of 2025 [1].

The budgetary relief allowance has been folded in. The budgetary relief allowances that were payable on 31 March 2025 are absorbed into the minimum wage, and the separate allowance was discontinued from 31 March 2025 by the Budgetary Relief Allowance of Workers (Amendment) Acts No. 9 and No. 10 of 2025 [2]. An employer may not reduce a worker's total pay to absorb the increase [1]. Stop showing a separate BRA line on payslips and check that basic pay plus the absorbed allowance is at least Rs 30,000.

Use the daily figure for daily-rated workers. The Act fixes the daily minimum at Rs 1,200 [1]. Do not derive it by dividing the monthly figure by 26: Rs 30,000 divided by 26 is Rs 1,153.85, which would underpay a daily-rated worker.

Contractor-supplied workers. The Commissioner-General of Labour must issue directives binding final employers who use contractors or intermediaries [1]. Check that workers supplied through a manpower agency are paid at least the minimum too.

Wages Board sector rates

For workers in a trade covered by a Wages Board, the applicable minimum is the board's current decision for that trade.

How to find your applicable Wages Board:

1. Identify your trade and whether a Wages Board covers it.
2. Obtain the current Wages Board decision for that trade from the Department of Labour.
3. Apply the correct rate for the worker's grade or category as set in the decision.

The employer's obligation: pay the higher of the national minimum and the applicable Wages Board rate. A business that operates in more than one trade, such as a manufacturer with its own retail outlet, may have parts of its workforce under different rate structures. Shop and office staff are under the Shop and Office Employees Act, which governs hours, leave and remuneration rules but does not set its own minimum wage rate [3].

Overtime

Overtime rules differ by the legislation that covers the worker:

Shop and Office Employees Act: normal hours are 8 a day and 45 a week [3]. Work beyond those hours is overtime, paid at one and a half times the normal hourly rate.

Factories and Wages Board trades: follow the Factories Ordinance and the Wages Board decision for the trade, which set their own hours and overtime triggers.

Overtime and EPF. Overtime is not part of the EPF contribution base. The EPF Act defines "earnings" to include wages, cost of living and similar allowances, holiday pay and food or meal allowances [4], and the EPF Department's FAQ, which is Department guidance rather than the Act, states that overtime, reimbursable travel and incentive or bonus payments are excluded [5]. Pay overtime through the payroll anyway, so the hours and payments are on the record.

EPF and ETF on minimum wage employees

EPF rates: employee 8 percent and employer 12 percent of total earnings [4].

ETF rate: employer 3 percent of total earnings, with no employee contribution [6].

Both are due by the last day of the following month [4] [6]. There is no exemption based on wage level: a worker on exactly the minimum wage generates contributions at the same rates as a senior employee. Labelling part of the minimum wage as an "allowance" does not take it out of EPF where it is a cost of living or similar allowance within the definition of earnings [4]. See our EPF and ETF guide for deadlines and surcharges.

What Labour Department inspectors look for

Inspectors typically review:

• payroll registers and wage payment records
• whether the national minimum or Wages Board rate is being applied
• whether a separate BRA line is still being paid on top of a basic below Rs 30,000
• whether overtime is calculated correctly
• whether EPF and ETF contributions are remitted on the correct base

Employees who believe they are paid below the applicable minimum can complain to the Department of Labour.

Related: Minimum wage amendment Act 2025 Sri Lanka: Act No. 11 explained.

Frequently asked questions

Does the national minimum wage apply to trainees?

Employees on ordinary employment contracts who are described internally as "trainees" are still workers and should be paid at least the minimum. If you run a formal apprenticeship scheme, confirm the applicable rate with the Department of Labour.

Can allowances count toward the minimum wage?

The former budgetary relief allowance now forms part of the minimum wage [2]. For other allowances, check whether they are fixed and regular. An irregular or conditional allowance is unlikely to count. When in doubt, pay the full minimum in basic salary.

What if we cannot afford to pay the new minimum wage?

The minimum wage is a legal obligation, not a negotiation. The Act sets one national monthly and daily rate, not a lower rate for small employers [1]. If your payroll sits below it, wages must increase.

How do I find out if my industry has a Wages Board?

Ask the Department of Labour, which administers the Wages Boards and can give you the current decision for your trade.

Talk to us. If you want your pay structure checked against the Rs 30,000 floor and the right Wages Board decision, our payroll team can review it with you; book a consultation at our contact page. For related obligations, see the maternity leave employer guide.

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

References

1. Parliament of Sri Lanka. National Minimum Wage of Workers (Amendment) Act No. 11 of 2025, certified 23 July 2025, minimum monthly and daily wage, no reduction of total pay, contractor directives. https://www.documents.gov.lk/view/acts/2025/7/11-2025_E.pdf . Primary. Accessed 15 October 2026.

1. Department of Labour. Budgetary Relief Allowance and National Minimum Wage amendments, 2025, summary of Acts No. 9, 10 and 11 of 2025. https://labourdept.gov.lk/wp-content/uploads/2025/07/Budgetary-Relief-Min-Wages-Ammend.pdf . Primary. Accessed 15 October 2026.

1. Department of Labour, Labour Code. Shop and Office Employees (Regulation of Employment and Remuneration) Act No. 19 of 1954, s.3. https://labourdept.gov.lk/downloads/labour_code/20.pdf . Primary. Accessed 15 October 2026.

1. Central Bank of Sri Lanka. Employees' Provident Fund Act No. 15 of 1958 (reprint), ss.10 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' Provident Fund Department. Frequently asked questions for employers, questions 3 to 5. https://epf.lk/?p=811 . Department guidance, not the Act. Accessed 15 October 2026.

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