How is an annual bonus taxed?

A bonus or other lump sum is taxed under the IRD's Tax Table 2 rather than spread across the year, which usually means a heavier deduction in the month it is paid. It is reconciled on the return.

Are dividends on my own bank's shares treated differently?

No. Dividends from a resident company carry 15% withholding as a final tax regardless of the payer, so they stay out of your slab base.

Can I claim back excess AIT on staff FD accounts?

Yes. Interest AIT is a credit against your total liability. If the 10% withheld exceeds what you owe overall, the excess is refundable when you file.

Income tax for bankers in Sri Lanka — Y/A 2025/2026

Salary and bonuses under APIT, FD interest at 10%, and bank or CSE shares where the 15% dividend withholding is final. Work out which schedules you file and what remains payable.

Identify your tax profile

What did you earn this year?

Pre-filled for your profession — add what applies, skip what doesn't.

Pre-selected for Banker — add or remove anything that doesn't match your year.

3 of 6 selected

A worked example for bankers

Illustrative figures for a typical income mix for bankers — employment salary, bank interest, dividends — using the default amounts below. Your own numbers will differ; use the wizard above for your actual figures.

Illustrative income

Employment salaryRs. 2,400,000

Bank interestRs. 240,000

DividendsRs. 180,000

Total assessable incomeRs. 2,820,000

Taxable income after reliefsRs. 840,000

Income tax before creditsRs. 50,400

Less: AIT already withheld by your bank− Rs. 24,000

Estimated balance payableRs. 26,400

A year-end or performance bonus taxed under Tax Table 2 usually results in a heavier-than-normal APIT deduction in the month it's paid, which is correct in isolation but frequently misreads as an error by staff comparing it to a normal month's payslip — it reconciles properly on the return, so don't chase it as a payroll mistake before checking the annual figure. Where your bank offers a staff share scheme or ESOP, vesting is a taxable event valued at the market price on the vesting date, separate from any later CSE dividend the shares themselves pay out — two different tax events, two different treatments, and conflating them is a common banker-specific error. FD and staff-preferential-rate deposits both carry the same 10% AIT regardless of the preferential rate, so a lower net rate doesn't mean a lower withholding percentage. If you hold shares in your own employer bank, the 15% dividend withholding applies identically to insider-held and public shares — there is no different treatment for staff shareholdings. Keep your own bank statements as the primary record even though your employer can usually reissue an APIT certificate; staff turnover in payroll departments makes a same-year request far easier than one filed two years later.

Common questions

How is an annual bonus taxed?: A bonus or other lump sum is taxed under the IRD's Tax Table 2 rather than spread across the year, which usually means a heavier deduction in the month it is paid. It is reconciled on the return.
Are dividends on my own bank's shares treated differently?: No. Dividends from a resident company carry 15% withholding as a final tax regardless of the payer, so they stay out of your slab base.
Can I claim back excess AIT on staff FD accounts?: Yes. Interest AIT is a credit against your total liability. If the 10% withheld exceeds what you owe overall, the excess is refundable when you file.

Work out a single figure instead

Income tax (IIT)

Estimate your annual liability across salary, freelance, interest and investment income — with 2025/2026 reliefs applied.

Dividend WHT

15% withholding on dividends from a resident company — a final tax, not reconciled or refunded.

Bank interest & AIT

10% Advance Income Tax withheld on deposit interest — creditable against your return, not a final tax.