If you’re an employer, HR manager, or payroll officer in Sri Lanka, getting APIT (Advance Personal Income Tax) deductions right is one of your most critical responsibilities. Mistakes can result in penalties for your company and problems for your employees.

The IRD has released updated APIT tables for the Year of Assessment 2025/2026 (effective from 1 April 2025). This guide covers everything you need to know.

What is APIT/PAYE?

APIT (Advance Personal Income Tax) is the system through which employers deduct income tax from employees’ salaries on a monthly basis and remit it to the IRD. It replaced the old PAYE (Pay As You Earn) system but many people still use both terms interchangeably.

Key facts:

• APIT is mandatory for all employers
• Deductions must be made monthly
• Payment to IRD is due by the 15th of the following month
• Employers must issue T10 certificates to employees after year-end

Who is Subject to APIT?

Any employee whose monthly salary exceeds Rs. 150,000 (annual Rs. 1,800,000) is subject to APIT deduction. This includes:

• Basic salary
• Overtime payments
• Bonuses and incentives
• Allowances (transport, fuel, meal, etc.)
• Non-cash benefits (company car, housing, etc.)
• Gratuity payments (in certain cases)

APIT Tax Tables for 2025/2026

The IRD has issued two main tables:

Table 1: Monthly Tax Deduction (Regular Salary)

For employees receiving a regular monthly salary throughout the year:

Monthly Taxable Income (after Rs. 150,000 relief)	Rate
First Rs. 83,333	6%
Next Rs. 41,667	18%
Next Rs. 41,667	24%
Next Rs. 41,667	30%
Balance	36%

Table 5: Employees Who Joined Mid-Year or Changed Employers

If an employee joined your company during the year, use Table 5 which adjusts calculations based on the number of months employed.

How to Calculate Monthly APIT (Step-by-Step Example)

Employee: Receives Rs. 280,000 per month gross salary

Step 1: Deduct monthly personal relief Rs. 280,000 – Rs. 150,000 = Rs. 130,000 monthly taxable income

Step 2: Apply monthly tax rates

Slab	Amount	Rate	Tax
First Rs. 83,333	83,333	6%	5,000
Next Rs. 41,667	41,667	18%	7,500
Remaining Rs. 5,000	5,000	24%	1,200
Total Monthly APIT			13,700

The employee takes home: Rs. 280,000 – Rs. 13,700 = Rs. 266,300

Don’t want to do this manually? Use the APIT Calculator at www.taxcalculator.lk/calculators — enter the salary and get instant results with Table 1 and Table 5 support.

T10 Certificate — Your Annual Obligation

After the end of each Year of Assessment, employers must issue a T10 (Certificate of Income Tax Deductions) to each employee. This document shows:

• Total employment income paid during the year
• Total APIT deducted
• Employee’s TIN
• Employer’s TIN

The updated T10 format for Y/A 2024/2025 includes a new line item for tax on tax benefit details. Make sure you use the latest format from the IRD.

Common Mistakes Employers Make

1. Not deducting APIT when salary exceeds Rs. 150,000 — This is a legal requirement, not optional
2. Using old tax tables — Always ensure you’re using the current year’s APIT tables
3. Not accounting for non-cash benefits — Company car, housing, mobile phone bills are all taxable
4. Late payment to IRD — Interest of 1.5% per month applies on late payments
5. Not issuing T10 certificates — Employees need these to file their own returns

How QuickBooks and Payroll Software Can Help

If you use payroll software like QuickBooks, ensure it’s updated with the latest 2025/2026 APIT tables. Most cloud-based payroll systems will update automatically, but always verify the calculations against the official IRD tables.

For detailed guidance, see our article on How to Use QuickBooks for PAYE and WHT.

Tools for Employers

At TaxCalculator.lk, we offer:

✅ Free APIT/PAYE Calculator — supports both Table 1 and Table 5 ✅ Bulk payroll tax calculation assistance ✅ T10 preparation guidance ✅ Consultation for HR and payroll teams

👉 Try our APIT Calculator now — it’s updated for 2025/2026 and completely free.

📩 Need payroll help? Contact our team for custom solutions.

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Tags: APIT table 2025/2026, PAYE calculator Sri Lanka, employer tax deduction, T10 certificate, payroll tax, HR manager tax guide, TaxCalculator.lk