Residents are subject to income tax on their worldwide income. Non-residents are taxed only on their income in Sri Lanka.
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The latest rates of personal income tax (PIT) are as follows:
Assessment years up to and including 2021/22
| Arrival (LKR*) | income tax rate (%) |
| The first 3 million | 6 |
| The next 3 million | 12 |
| More than 6 million | 18 |
* Sri Lankan Rupees
The period of the first nine months of 2022/23
| Income | income tax rate (%) |
| The first 2.25 million | 6 |
| The next 2.25 million | 12 |
| More than 4.5 million | 18 |
The period of the last three months of 2022/23
| Income | income tax rate (%) |
| The first 125,000 | 6 |
| The next 125,000 | 12 |
| The next 125,000 | 18 |
| The next 125,000 | 24 |
| The next 125,000 | 30 |
| More than 625,000 | 36 |
Assessment years from and including 2023/24
| Income | income tax rate (%) |
| The first 500,000 | 6 |
| The next 500,000 | 12 |
| The next 500,000 | 18 |
| The next 500,000 | 24 |
| The next 500,000 | 30 |
| More than 2.5 million | 36 |
Preferential tax rates
Favorable tax rates apply to amounts paid to an employee upon termination of employment when the plan applies equally to all employees through compensation, commuted pensions, pensions and contributions to the Employee Foundation. Accumulated employer contribution to an approved or regulated provident fund is tax-free upon withdrawal.
As of January 1, 2020, the tax rates for pensions are as follows:
| Retirement | Tax rate (%) |
| About the first 10 million LKR | nula |
| On the next LKR 10 million | 6 |
| On balance | 12 |
Withholding Tax (WHT) rates.
You seewithholding taxsection in the income tax overview.