What is the APIT tax-free threshold in 2025/26?

LKR 150,000 a month, or LKR 1,800,000 a year. Regular employment income up to that amount attracts no APIT.

Is APIT deducted before or after EPF?

Before. APIT is computed on gross remuneration. The employee's 8% EPF contribution is not deducted from the APIT base.

Yes. Since 1 January 2023 every employer must deduct APIT from every employee's regular remuneration above the relief, without needing the employee's consent.

How is a bonus taxed under APIT?

A bonus is a lump-sum payment taxed under Table 2. The table looks at the employee's cumulative income for the year to date to find the rate that applies to the lump sum, and that tax is deducted in addition to the normal Table 1 deduction for the month.

What is the APIT on a salary of LKR 250,000?

LKR 100,000 is above the relief. The first LKR 83,333.33 is taxed at 6% (LKR 5,000) and the next LKR 16,666.67 at 18% (LKR 3,000), giving APIT of LKR 8,000 for the month.

APIT for employers in Sri Lanka 2025/26: tax tables, relief, Table 2 and filing

How to deduct Advance Personal Income Tax from salaries under the slabs in force from 1 April 2025, with worked examples, Table 2 for bonuses and lump sums, and the monthly and annual filing duties.

Last updated 16 September 2026 by HR Community Editorial

Key facts

In force from: 1 April 2025 (Inland Revenue (Amendment) Act 2025)
Tax-free relief: LKR 150,000 a month (LKR 1,800,000 a year)
Slabs on income above relief: 6% on the first LKR 1,000,000 a year, 18% on the next 500,000, 24% on the next 500,000, 30% on the next 500,000, 36% on the balance
Monthly slab widths (Table 1): 6% on 83,333.33; 18% on 41,666.67; 24% on 41,666.67; 30% on 41,666.67; 36% thereafter
Base: Gross monthly remuneration before the employee's EPF deduction
Lump sums: Bonuses, arrears and terminal benefits use Table 2, added on top of Table 1
Payment deadline: 15th of the following month
Annual duties: T10 certificate to each employee by 30 April; Annual Statement of Employer to the IRD

Advance Personal Income Tax is the tax an employer must withhold from salaries and remit to the Inland Revenue Department each month. It replaced PAYE in 2020, became compulsory for all employees from 1 January 2023, and had its slabs widened by the Inland Revenue (Amendment) Act of 2025 with effect from 1 April 2025. This guide describes the rules in force for the year of assessment 2025/26.

Who deducts and from whom

Every employer, on every employee whose regular monthly remuneration exceeds the relief. Directors' fees, non-cash benefits and payments to non-resident employees have their own rules, but for the ordinary payroll of resident employees the tables below apply.

The 2025/26 slabs

The annual structure is a relief followed by five bands:

Annual income band	Rate
First LKR 1,800,000	0% (relief)
Next LKR 1,000,000	6%
Next LKR 500,000	18%
Next LKR 500,000	24%
Next LKR 500,000	30%
Balance	36%

The IRD publishes this as monthly Table 1 by dividing by twelve:

Monthly remuneration	Rate on this portion
Up to LKR 150,000	0%
LKR 150,000.01 to 233,333.33	6%
LKR 233,333.34 to 275,000.00	18%
LKR 275,000.01 to 316,666.67	24%
LKR 316,666.68 to 358,333.33	30%
Above LKR 358,333.33	36%

Worked examples

Salary LKR 200,000 a month:

Step	Amount
Above relief	LKR 50,000
6% on LKR 50,000	LKR 3,000
Monthly APIT	LKR 3,000

Salary LKR 400,000 a month:

Step	Amount
Above relief	LKR 250,000
6% on 83,333.33	LKR 5,000.00
18% on 41,666.67	LKR 7,500.00
24% on 41,666.67	LKR 10,000.00
30% on 41,666.67	LKR 12,500.00
36% on 41,666.66	LKR 15,000.00
Monthly APIT	LKR 50,000.00

The APIT calculator produces this breakdown for any salary.

What is in the base

Gross remuneration for the month: salary, wages, fixed allowances, overtime, commission, and the value of benefits in kind (housing, vehicles, and so on) at the IRD's prescribed values. The employee's own EPF contribution does not reduce the base. Reimbursement of expenses actually incurred on the employer's business is not remuneration.

Table 2: bonuses, arrears and lump sums

A payment that is not part of regular monthly remuneration, such as an annual bonus, back-pay, an incentive or a terminal payment, is taxed under Table 2. The employer adds the lump sum to the employee's cumulative remuneration for the year to date to find the marginal band, then applies that band's rate to the lump sum. The Table 2 tax is deducted in the month of payment in addition to the ordinary Table 1 deduction.

Terminal benefits (gratuity, compensation for loss of office, commuted pensions) have separate, concessionary Table 2 rates and thresholds. Check the current IRD terminal benefit table before processing a leaver's final settlement.

Employees with more than one employment

An employee with a second job should tell the secondary employer, which then deducts under Table 3 at a flat rate on the whole remuneration with no relief, since the relief is used against the primary employment.

Paying and filing

Duty	Deadline
Remit APIT deducted in a month	15th of the following month
Monthly schedule of deductions (with payment)	15th of the following month
T10 certificate of deduction to each employee	30 April after the year end
Annual Statement of Employer (with T10 details) to the IRD	30 April after the year end

Payment is made through the IRD's e-Services portal or designated banks, quoting the employer's TIN. Late payment attracts interest and penalties under the Inland Revenue Act.

Software checklist

Table 1 slabs match the IRD publication for the year of assessment, and the vendor updates them, not you.
Table 2 is applied to bonuses with cumulative-income lookup, not just a flat rate.
Terminal benefits use the concessionary table.
The T10 and the Annual Statement export in the IRD's format.
The base includes overtime and allowances and excludes reimbursements.

Frequently asked questions

What is the APIT tax-free threshold in 2025/26?: LKR 150,000 a month, or LKR 1,800,000 a year. Regular employment income up to that amount attracts no APIT.
Is APIT deducted before or after EPF?: Before. APIT is computed on gross remuneration. The employee's 8% EPF contribution is not deducted from the APIT base.
Is APIT compulsory?: Yes. Since 1 January 2023 every employer must deduct APIT from every employee's regular remuneration above the relief, without needing the employee's consent.
How is a bonus taxed under APIT?: A bonus is a lump-sum payment taxed under Table 2. The table looks at the employee's cumulative income for the year to date to find the rate that applies to the lump sum, and that tax is deducted in addition to the normal Table 1 deduction for the month.
What is the APIT on a salary of LKR 250,000?: LKR 100,000 is above the relief. The first LKR 83,333.33 is taxed at 6% (LKR 5,000) and the next LKR 16,666.67 at 18% (LKR 3,000), giving APIT of LKR 8,000 for the month.