Updated on 29 March 2018
In terms of Section 83 of the Inland Revenue Act No. 24 of 2017, Every Employer is required to deduct income tax from the gains and profits from employment of each employee, liable to pay income tax at the time such remuneration is paid or credited.
For this purpose the Commissioner General of Inland Revenue specifies specify the Income Tax Tables, for the purpose of withhold tax from a payment that is to be included in calculating the taxable income of an employee, for the year of assessment commencing on April 1, 2018.
P.A.Y.E. income tax tables and instructions – with effect from 01.04.2018
Index: References
Tax Table No. 01 – Monthly Tax Deductions from Regular profits
Guide for how to apply
Table 1
Tax Table No. 02 – Rates for deductions of tax from Lump-sum-payments
Guide for how to apply
Table 2
Tax Table No. 03 – Deduction of Tax from Once-and-for-all-payments (Terminal Benefits)
Tax Table No. 04 – Rates for the deduction of tax from the regular profits from employment of employees who are non-citizens in Sri Lanka
Tax Table No. 05 – Deduction of tax on cumulative Profits from employment
Guide for how to apply
Table 5
Tax Table No. 06 – Tax on Tax Rates
Tax Table No. 07 – Rates for the deduction of tax from the regular profits from employment of any employee,who has not furnish the primary employment declaration, or who employed under more than one employer
Guideline:
Excel Version:
Primary Employment Declaration Form – Download
Employer & Employee Obligations under PAYE Scheme
- Employee should furnish Primary Employment Declaration to his Employer
- Remit to the Commissioner General every tax deduction made under PAYE Scheme during a month,
not later than the 15th day of the month immediately following. - Where the Employer fails to withhold the relevant tax :-
- Employer himself responsible to remit the due tax to CGIR in the same manner, at the same
time as the tax withheld and recover such amount from the Employee - Employer & Employee jointly and severally liable for the payment of the tax on or before
the due date
- Employer himself responsible to remit the due tax to CGIR in the same manner, at the same
- Issue a WHT Certificate to all employees, details including the tax deductions made during the year
(T10 form), before the expiry of the 30th day of April or where an employment ceases during the year
of assessment, not more than thirty days from the date of cease. - Furnish Annual Statement, with Schedules to the Commissioner General not later than 30th April
every year. - Penalty and Interest on Non Payment
- a penalty equal to 20% of the due tax, but not paid, in case of a failure to pay /or remit all or
part of the tax for a tax period within 14 days of the due date - an interest equal to 1.5% per month or part month on the amount of tax, if the tax is not paid
by due date
- a penalty equal to 20% of the due tax, but not paid, in case of a failure to pay /or remit all or
- Keep in safe custody the documents relating to every payment made to employees. Whenever officers
authorized by the Commissioner General call for inspection, such documents should be made
available to them. - In the following circumstances, the tax referred to in the table 6 should be paid in addition to the tax
referred to in the Tables 1, 2, 4, 5 and 7- When an employer or any other person settles income tax of an employee, without it being
deducted from his salary, or - Reimbursement (by the employer) of income tax already deducted from employee’s salary
and remitted to Inland Revenue Department.
- When an employer or any other person settles income tax of an employee, without it being
- Required to contact the Commissioner PAYE Audit Unit, Nawam Mawataha or The Secretariat of
Inland Revenue Department, if it appears that in relation to any payment made to an employee, no
tax table given;or if the employer requires any further clarification.