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Sri Lanka Freelancer Tax Calculator — Foreign Income 2025/26

Find the tax on your foreign freelance, remote-work, or service-export earnings under Sri Lanka's concessionary 15%-capped structure for Year of Assessment 2025/26 (1 April 2025 – 31 March 2026). See your take-home and how much remitting through a bank saves you. No signup, sources cited below.

By Induwara AshinsanaUpdated Jun 7, 2026
Freelancer tax estimateY/A 2025/26
IRD verified · 2026
Rs

Earnings paid in foreign currency for services you provide — converted to rupees. Use the USD–LKR calculator first if you bill in dollars.

Quick presets

The concessionary 15% cap only applies when earnings reach Sri Lanka through a licensed bank.

Rs

Income tax paid abroad on the same earnings. Credited against your SL liability, up to that liability.

Annual tax payable
Rs 540,000
Monthly tax
Rs 45,000
Monthly take-home
Rs 455,000
Effective rate
9%
Bank-remitted · 15% cap
Why remitting through a bank pays off
Concessionary (you)
Rs 540,000
Standard rates
Rs 1,032,000
You save / year
Rs 492,000

Keeping this income inside the banking channel taxes it at the 15% cap instead of the standard progressive rates (up to 36%).

Bracket breakdown

RateBracket (annual)AmountTax
6%Rs 0 — Rs 1,000,000Rs 1,000,000Rs 60,000
15%Rs 1,000,000 — Rs 4,200,000Rs 3,200,000Rs 480,000
Gross taxRs 540,000

Y/A 2025/26. Covers pure foreign-service income for resident individuals. Excludes local PAYE/APIT income, SSCL, VAT, and treaty apportionment — see the notes below.

Sources: IRD Public Notice PN/IT/2025-01 (the 15%-capped service-income structure) and the IRD Tax Chart for Y/A 2025/26 (standard rates). Personal relief Rs 1,800,000/yr. Full links and methodology are below this tool.

How it works

Until 31 March 2025, foreign-currency service income remitted through a bank was effectively exempt. From Year of Assessment 2025/26 the Inland Revenue Department brought it into the tax net, but at a concessionary rate set out in Public Notice PN/IT/2025-01. The headline is a statutory maximum of 15% — far below the standard top rate of 36%.

Let I be your annual foreign service income in rupees (monthly figures are multiplied by 12). The calculation runs in four steps:

  1. Personal relief. Subtract Rs 1,800,000 to get taxable income T = max(0, I − 1,800,000). If T is zero, no tax is due.
  2. First slab. The first Rs 1,000,000 of T is taxed at 6%.
  3. Balance at the cap. Everything above Rs 1,000,000 is taxed at the statutory maximum of 15%. So gross tax is G = 0.06 × min(T, 1,000,000) + 0.15 × max(0, T − 1,000,000).
  4. Foreign tax credit. Tax you already paid abroad on the same income is credited against G, capped at G itself. Payable = max(0, G − foreign tax paid).

The 15% cap is conditional: it only applies when the earnings reach Sri Lanka through a licensed bank. Earnings kept offshore or routed informally fall back to the standard individual progressive rates — Rs 1,000,000 at 6%, then 18%, 24%, 30% and 36% in Rs 500,000 bands — which is why the calculator shows a direct comparison and the rupees you save by banking the income. Those standard slabs are the exact figures used by the main Sri Lanka Income Tax Calculator, so the two tools never disagree.

Worked examples

Example A — reconciles to the IRD figure

Rs 3,600,000/yr · bank-remitted

  1. Taxable: Rs 3,600,000 − Rs 1,800,000 = Rs 1,800,000
  2. First Rs 1,000,000 × 6% = Rs 60,000
  3. Balance Rs 800,000 × 15% = Rs 120,000
  4. Tax = Rs 180,000 · effective rate 5.0%
  5. Monthly take-home ≈ Rs 300,000 − Rs 15,000 = Rs 285,000

Example B — Nimali, bank vs offshore

Rs 500,000/mo (Rs 6,000,000/yr) · bank-remitted

  1. Taxable: Rs 6,000,000 − Rs 1,800,000 = Rs 4,200,000
  2. Rs 1,000,000 × 6% = Rs 60,000
  3. Rs 3,200,000 × 15% = Rs 480,000
  4. Concessionary tax = Rs 540,000 · effective rate 9.0%
  5. Standard rates on the same income = Rs 1,032,000
  6. Saving by remitting through a bank = Rs 492,000/yr

Example C — at the 15% boundary

Rs 2,800,000/yr · bank-remitted

  1. Taxable: Rs 2,800,000 − Rs 1,800,000 = Rs 1,000,000
  2. Taxable hits the 6% slab cap exactly — the 15% band is empty
  3. First Rs 1,000,000 × 6% = Rs 60,000
  4. Tax = Rs 60,000 · effective rate ≈ 2.14%
  5. The 15% rate only bites on income above Rs 2,800,000/yr

Frequently asked questions

Sources & references

The relief, the 6% slab, and the 15% cap on this page were last cross-checked against the IRD sources on 2026-06-07. This tool covers pure foreign-service income for resident individuals; it does not model combined local employment income, SSCL, VAT on services, quarterly installments, or treaty-specific double-tax relief. For figures that affect your filing, confirm with a qualified tax advisor or the IRD.

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