Why Freelancers Need to File Income Tax
If you’re a freelancer, self-employed consultant, content creator, or service provider in Sri Lanka, you’re legally required to declare your income to the Inland Revenue Department (IRD). The good news? It’s easier than you think — and this guide will walk you through it.
🧾 Step 1: Determine If You’re Liable to Pay Tax
In Sri Lanka (as of 2025), any individual earning more than LKR 1.2 million per year must register and pay income tax.
💡 This includes income from:
- Freelancing (local or overseas)
- Consulting or part-time gigs
- Affiliate marketing or YouTube income
- Upwork/Fiverr/remote contracts
If you earn LKR 100,000+ per month, you’re likely taxable.
🧮 Step 2: Track and Total Your Income
Keep records of:
- Bank transfers from clients
- Invoices or PayPal receipts
- Upwork or Fiverr earnings
- Cryptocurrency payments (if applicable)
💡 Use tools like Excel, Google Sheets, or TaxCalculator.lk to track monthly income.
🧾 Step 3: Understand the Tax Rates (2025)
The individual income tax slabs (2025) for freelancers are:
| Annual Income (LKR) | Tax Rate |
|---|---|
| Up to 1.2 million | 0% |
| 1.2M – 1.74M | 6% |
| 1.74M – 2.28M | 12% |
| 2.28M – 2.82M | 18% |
| 2.82M – 3.36M | 24% |
| Over 3.36 million | 36% |
Use our Freelancer Tax Calculator to get an accurate estimate instantly.
🧑💻 Step 4: Register with the IRD
- Go to www.ird.gov.lk
- Click e-Services → Individual Taxpayer Registration
- Upload your NIC and utility bill
- Receive your TIN (Tax Identification Number)
You’ll need this to file returns and make payments.
📤 Step 5: File Your Tax Return Online
You must file an annual income tax return by November 30th each year.
Steps:
- Log in to the RAMIS portal (https://eservices.ird.gov.lk)
- Choose “Individual Income Tax”
- Enter your gross income and expenses
- Declare your net profit (taxable income)
- Submit and pay tax online via card or bank transfer
💼 What Can Freelancers Deduct?
To reduce your tax, you can deduct legitimate business expenses:
✅ Internet and mobile bills
✅ Software subscriptions (e.g., Adobe, Zoom)
✅ Marketing or platform fees (Upwork fees)
✅ Laptop depreciation
✅ Rent (if home office used)
✅ Bonus: Tips to Stay Compliant
- Always issue invoices — even for overseas clients
- Keep screenshots and email confirmations
- Convert foreign income to LKR using Central Bank’s exchange rate
📣 Need Help Calculating or Filing?
We’ve helped hundreds of freelancers in Sri Lanka simplify their tax process.
👉 Use TaxCalculator.lk to:
- Instantly estimate your freelance tax
- Get tips to reduce your liability
- Contact us for filing support or registration help
Have questions about freelance taxes? Leave a comment or email us — we’re here to help!
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