Are professional fees subject to withholding tax?

Service fees paid by a withholding agent carry 5% WHT above the monthly threshold. That is a credit, not a final tax — the full amount still goes on your return and the 5% is offset against the slab charge.

Do I need to pay quarterly instalments?

Yes, once your estimated liability crosses the SET threshold. Self-assessed income has nothing withheld monthly, so the IRD collects it in four quarterly instalments due 15 August, 15 November, 15 February and 15 May.

What records do I need for chamber expenses?

Invoices and payment evidence for anything you deduct — chamber rent, staff, law reports, professional subscriptions. Capital items are claimed through capital allowances rather than deducted outright.

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

Client fees, retainers and appearance income with nothing withheld at source, plus interest your bank has already taxed. Work out which schedules you file and what falls due at year end.

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 Lawyer — add or remove anything that doesn't match your year.

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A worked example for lawyers

Illustrative figures for a typical income mix for lawyers — freelance or business, bank interest — using the default amounts below. Your own numbers will differ; use the wizard above for your actual figures.

Illustrative income

Freelance or businessRs. 1,200,000

Bank interestRs. 240,000

Total assessable incomeRs. 1,440,000

Taxable income after reliefsRs. 0

Income tax before creditsRs. 0

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

Estimated balance payableRs. 0

The 5% WHT on professional fees only applies when the payer is a registered withholding agent — a corporate client, typically — so fees from individual clients or smaller firms often arrive gross with nothing withheld at all, and it's easy to assume the 5% was deducted everywhere when it wasn't. Reconcile every fee note against the actual bank credit before you file; the gap is what you owe, not what you assumed was covered. Retainers paid in advance are income when earned, not when received, so a retainer covering several months of work should be recognised across those months rather than lumped into the month of receipt — get this wrong and you either overstate or understate a single quarter's SET instalment. Chamber-sharing arrangements complicate expense claims: only the portion of rent, staff cost and library subscriptions attributable to your own practice is deductible, and an even split among chamber-mates rarely matches actual usage. Law reports and professional subscriptions are deductible in the year paid; a bar renewal fee and professional indemnity premium both qualify, but personal chamber attire and travel to purely social bar functions do not.

Common questions

Are professional fees subject to withholding tax?: Service fees paid by a withholding agent carry 5% WHT above the monthly threshold. That is a credit, not a final tax — the full amount still goes on your return and the 5% is offset against the slab charge.
Do I need to pay quarterly instalments?: Yes, once your estimated liability crosses the SET threshold. Self-assessed income has nothing withheld monthly, so the IRD collects it in four quarterly instalments due 15 August, 15 November, 15 February and 15 May.
What records do I need for chamber expenses?: Invoices and payment evidence for anything you deduct — chamber rent, staff, law reports, professional subscriptions. Capital items are claimed through capital allowances rather than deducted outright.

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.

WHT on payments

Sub-contractor 5%, rent 10%, interest 10% AIT, services 5%. Pick the payment type, get the rate and the form.

Bank interest & AIT

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