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.