Gratuity calculator (Sri Lanka)
Half a month's last salary for every completed year of service after five years.
Payment of Gratuity Act No. 12 of 1983: employers with 15 or more employees, after 5 completed years.
| Eligible | Yes |
| Half month's salary | LKR 60,000.00 |
| Completed years | 7 |
| Gratuity payable | LKR 420,000.00 |
How this is calculated
- Gratuity = half of the last drawn monthly salary multiplied by the number of completed years of service.
- Applies to employers with 15 or more employees on any day in the preceding 12 months, for employees with five or more years of continuous service, under the Payment of Gratuity Act No. 12 of 1983.
- Payable within 30 days of the employee leaving. For monthly-rated employees 'salary' means the last month's basic wage or salary.
Frequently asked questions
- Is gratuity payable if the employee resigns?
- Yes. Gratuity is payable on termination for any reason after five years of service, including resignation. It can be forfeited only for specific misconduct such as fraud or wilful damage.
- Does gratuity attract tax?
- Gratuity is treated as a terminal benefit and taxed under APIT Table 2 at the terminal benefit rates and thresholds in force, not under the regular Table 1 slabs.
- Do employers with fewer than 15 employees pay gratuity?
- The Act does not compel them. Many still pay gratuity by contract or custom.