Understanding your tax obligations shouldn’t be a headache. For the Year of Assessment 2025/2026, the Sri Lankan government has introduced several changes to provide relief to middle-income earners.

The Basics: Are You Liable?

In Sri Lanka, you are liable to pay Personal Income Tax (PIT) if your total income exceeds the tax-free threshold.

• Tax-Free Allowance: The first Rs. 1,800,000 of your annual income is tax-free.
• Monthly Equivalent: This means if you earn less than Rs. 150,000 per month, you generally do not pay income tax.

Current Tax Slabs (Progressive Rates)

Once you cross the Rs. 1.8 million threshold, the following progressive rates apply:

1. First Rs. 1,000,000: 6%
2. Next Rs. 500,000: 12%
3. Next Rs. 500,000: 18%
4. Next Rs. 500,000: 24%
5. Next Rs. 500,000: 30%
6. Balance: 36%

Key Takeaway

Always remember that tax is calculated on your Taxable Income (Total Income minus Reliefs/Deductions). Use our [Tax Calculator] to see your exact liability in seconds.