How is gratuity taxed in Sri Lanka?

On concessionary bands: the first Rs. 10,000,000 at 0%, the next Rs. 10,000,000 at 6%, and the balance at 12% — well below the 36% top rate.

Are EPF/ETF withdrawals taxed?

Approved-fund payments are generally exempt; unapproved schemes fall to normal progressive rates. Confirm your fund's approved status.

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Gratuity & ETF Tax Calculator Sri Lanka

Stepped concessionary rates on terminal benefits. For employees leaving service.

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Reflects Year of Assessment 2025/2026 · Last updated 2026-06-13 · Reviewed by TaxWise · Source: Inland Revenue Act No. 24 of 2017, Inland Revenue Department

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ETF / gratuity / terminal benefits

Concessionary 0% / 6% / 12% bands on cumulative Rs. 10M + 10M + balance.

Benefit type

Payment amount (LKR)Rs. 2,500,000

Rs. 0Rs. 50,000,000

Result

Rs.0

Concessionary slabs (803a/b/c)

803a (0% band)Rs. 2,500,000 → tax Rs. 0

803b (6% band)Rs. 0 → tax Rs. 0

803c (12% band)Rs. 0 → tax Rs. 0

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One payment, one routing path. No multi-payment cumulative slabs.

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Slabs: first Rs. 10,000,000 @ 0%, next Rs. 10M @ 6%, balance @ 12%.

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Prepare terminal benefits on Schedule 8

Gratuity, ETF, and pension commutation routed through 803a/b/c with CGIR flags preserved.

Split concessionary, progressive, and exempt portions per kind
Cumulative 0% / 6% / 12% bands across all TB payments in the Y/A
Annexure 2c exempt portions for approved schemes

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Filing opens Apr 2026 · Y/A 2025/2026 return due 30 November 2026

Frequently asked questions

How is gratuity taxed in Sri Lanka?: On concessionary bands: the first Rs. 10,000,000 at 0%, the next Rs. 10,000,000 at 6%, and the balance at 12% — well below the 36% top rate.
Are EPF/ETF withdrawals taxed?: Approved-fund payments are generally exempt; unapproved schemes fall to normal progressive rates. Confirm your fund's approved status.

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Estimator disclaimer

Results follow the Inland Revenue Act and the 2025 Amendment for Y/A 2025/2026 but are not tax advice. Rounding, missing inputs, and simplified assumptions can change the final figure; only a filed return counts with IRD.