What Is the Statement of Estimated Tax (SET) in Sri Lanka?

The Statement of Estimated Tax Payable (SET) is a mandatory quarterly advance tax payment required from self-employed individuals, freelancers and companies whose estimated annual tax liability is LKR 6,000 or more.

Use our free Quarterly SET Calculator (click the 📅 Quarterly SET tab) to calculate your four quarterly installments for Y/A 2025/2026.

SET Payment Deadlines — Y/A 2025/2026

How Is the Quarterly Installment Calculated?

Quarterly installment = (Estimated annual tax − APIT/WHT credits) ÷ 4

Example: Estimated annual tax LKR 500,000, APIT credits LKR 100,000:

• Net tax to pay: LKR 400,000
• Each quarterly installment: LKR 100,000

Who Must Pay SET?

• Self-employed individuals (freelancers, consultants, doctors, lawyers)
• Business owners receiving business income
• Individuals with rental income, investment income or other non-employment income
• Companies paying corporate income tax in installments

Salaried employees whose only income is employment income with APIT deducted at source are generally not required to pay SET — their employer handles the advance tax.

Penalty for Missing SET Payments

Missing or underpaying a quarterly installment results in a 2% per month interest charge on the shortfall from the due date to the date of actual payment. This is in addition to any late filing penalty on the annual return.

FAQs

What is the minimum tax that triggers SET payments?

If your estimated annual income tax liability is LKR 6,000 or more, you must make quarterly SET payments. Below this amount, no installments are required.

What happens if I overpay my SET installments?

If your SET payments exceed your final tax liability, the IRD will issue a refund after you file your annual income tax return. You can also apply the overpayment as a credit against future tax years.

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