Sri Lanka Employee Cost Calculator, Employer EPF, ETF & Gratuity

When you advertise a salary, the gross figure is only part of what an employee actually costs you. Three statutory on-costs sit on top of it in Sri Lanka, and all three are fixed by Act of Parliament. They do not vary by negotiation or market conditions. This calculator adds them to your gross and reports the true cost-to-company.

1. Employer EPF, 12% of liable earnings. Under the Employees' Provident Fund Act No. 15 of 1958 the employer pays 12% of the employee's total earnings into the EPF. (The employee adds a separate 8% from their own pay, that is not an employer cost.)
2. Employer ETF, 3% of liable earnings. Under the Employees' Trust Fund Act No. 46 of 1980 the employer pays 3%. The employee contributes nothing to the ETF, so the full 3% is an employer on-cost.
3. Gratuity provision, ≈4.17% of gross per month. The Payment of Gratuity Act No. 12 of 1983 entitles an employee in a workplace of 15+ people to half a month's wage for every completed year of service once they have at least 5 years. Half a month spread across 12 months is 0.5 ÷ 12 ≈ 4.17% accrued monthly. Setting this aside each month turns a large termination payout into a predictable line item.

The total monthly cost is the sum: gross + employer EPF + employer ETF + gratuity provision. Multiply by 12 for the annual budget line. The on-cost loading is the three on-costs divided by gross, expressed as a percentage, for a firm above the gratuity threshold it is a flat 19.17% of gross (12% + 3% + 4.17%), and 15% for a small firm where gratuity does not apply.

By default the EPF/ETF base equals the gross salary, which gives the right answer for most salaried staff. If your payroll excludes certain items from EPF/ETF (for example irregular overtime), enter the lower “liable earnings” figure and the contributions adjust, the gratuity provision still accrues on the full wage, as the Gratuity Act uses the employee's wage, not the EPF base. The tool also shows the one-off gratuity liability once service reaches 5 years, clearly separated as a termination lump sum rather than a monthly cost.

• Central Bank of Sri Lanka: Employees' Provident Fund (employer 12%, employee 8%)
• Employees' Trust Fund Board: ETF (employer 3%, employee nil)
• Department of Labour: Payment of Gratuity Act No. 12 of 1983 (½ month/year, 15+ staff, 5-year vesting)

The 12%, 3% and half-month-per-year rates are statutory and were last cross-checked against the EPF, ETF and Department of Labour sources on 2026-06-23. They change only if Parliament amends the relevant Act. Figures are an estimate for budgeting; confirm the statutory definition of “earnings” and gratuity eligibility with the Department of Labour for edge cases. This v1 covers monthly-rated employees (the ½-month formula); the daily-rated 14-days-per-year formula is out of scope.