Workforce Payments Guide Sri Lanka

Last updated: Feb 07, 2024

Currency
Rupee (LKR)
Payroll Frequency
Daily/Weekly/Monthly
Capital
Sri Jayawardenepura-Kotte & Colombo
Fiscal Year
1 January - 31 December
Employer Taxes
22.75% – 25.75%
Employee Costs
8%
Central Bank
Central Bank of Sri Lanka (CBSL)
video poster

3rd Party Payments

Authority  Payment Frequency  Due Date  Payment Method 
Inland Revenue Department  Annually  On or before 30th of November, of the succeeding year of assessment  Online Tax Payment Platform (OTPP) through LankaPay CEFTS 
Social Security Contribution Levy (SSCL)  Quarterly  Every registered person shall furnish to the Commissioner General a return in writing for every quarter on or before the twentieth day of the month after the end of each relevant quarter  Payments can be made at any branch of Bank of Ceylon 

Payments Coverage

Papaya Global supports workforce payments in Sri Lanka with Potential local requirements.

Contractor Payments

Payroll Frequency

Daily, weekly, fortnightly, or on a monthly basis.

IBAN

KYC

The Know-Your-Customer (KYC) process in Sri Lanka involves:

Customer Identification: The customer’s identity is verified using reliable, independent source documents, data, or information.

Beneficial Ownership Identification: The beneficial owner of the customer is identified and reasonable measures are taken to verify their identity.

Understanding Business Relationship: Information on the purpose and intended nature of the business relationship is obtained.

Ongoing Due Diligence: Regular monitoring of the business relationship is conducted to ensure transactions are consistent with the institution’s knowledge of the customer, their business, and risk profile.

Banking Regulations

In Sri Lanka, the specific banking regulations that impact cross-border workforce payments include:

1. The Banking Act and the Monetary Law Act which are the primary statutes governing the banking industry.

2. The Payment and Settlement Systems Act that empowers CBSL’s Payments and Settlements Division to regulate and supervise payments, clearing and settlement systems, and prescribe relevant policies.

3. The Foreign Exchange Act and regulations which regulate foreign currency related matters.

4. The Financial Transactions Reporting Act, Prevention of Terrorism (Temporary Provisions) Act, Prevention of Money Laundering Act and Convention on the Suppression of Terrorist Financing Act, which regulate the anti-money laundering and countering terrorist financing regime.

5. A cybersecurity bill and data privacy bill were proposed in 2019 and are currently in the process of being finalised before it is put to the parliament for enactment. These could potentially impact online and digital cross-border payments.

Opening a bank account

Opening a company bank account in Sri Lanka typically involves the following steps:

  • The business should be registered in Sri Lanka. This can include various types of businesses such as sole proprietorships, partnership businesses, limited companies, societies, clubs, and associations.
  • A visit to a chosen bank branch is usually required to discuss the requirements with a bank officer.
  • An account opening application needs to be completed.
  • A Board Resolution authorizing the opening of the account is usually required.
  • A copy of Form 20 (Change of Directors/Secretary and Particulars of Directors/Secretary) under the Companies Act is typically needed.

Depending on the nature of the business entity, business registration certificates issued under the Business Names Ordinance and other business-related documents specified in the application form may be required.

These requirements can vary depending on the bank and the type of business.

International Banks

Major foreign banks operating in the country include ICICI Bank, Union Commercial Bank, HSBC (Hongkong and Shanghai Banking Corporation), Deutsche Bank, Standard Chartered Bank, Citibank, and State Bank of India.

Major Local Banks

The major local banks operating in Sri Lanka are:

1. Bank of Ceylon

2. The Commercial Bank of Ceylon Ltd.

3. Hatton National Bank PLC (HNB)

4. Pan Asia Banking Corporation PLC

5. People’s Bank

6. Sampath Bank PLC

7. Seylan Bank PLC

8. Union Bank Sri Lanka PLC

Payment Tools

The B2C payment tools available in Sri Lanka include:

1. Cheques

2. Sri Lanka Interbank Payment System (SLIPS)

3. Credit/Debit/Charge/Stored Value cards

4. National Card Scheme

5. Customer account-based mobile payments

6. Internet banking

7. QR code-based payments

8. Online payment gateways

9. Sampath Bank Payment Gateway

10. Seylan Bank Payment Gateway

11. Commercial Bank Payment Gateway

12. HNB Bank Payment Gateway

13. Nation Trust Bank Payment Gateway

14. Genie

15. mCash

16. Onepay

17. WebXPay

18. PayHere

19. 2Checkout

20. DirectPay

21. iPay

22. Getsolobyhnb

23. Simple Pay

24. Credit and debit cards, e-wallets, vouchers, instant bank transfer, mobile solutions.

Cryptocurrency

The Central Bank of Sri Lanka (CBSL) has not issued any license or authorized any individual or company to operate schemes involving cryptocurrencies.

Cryptocurrencies are not recognized as a legal tender in Sri Lanka and there are significant financial, operational, legal, and security-related risks associated with their use. The public is also warned that there are no regulatory safeguards related to their usage in the country. Therefore, while cryptocurrencies are not illegal, they exist in a legal grey area and those who use them do so at their own risk.

Stay up to date on workforce payments & employment law changes

Woman holding arms

See how Papaya can deliver faster and more efficient payments to your global workforce

The information provided in the Papaya Global Web site is provided for informational purposes only. The materials are general in nature; they are not offered as advice on a particular matter and should not be relied on as such. Use of this Web site does not constitute a legal contract or consulting relationship between Papaya Global and any person or entity. Although every reasonable effort is made to present current and accurate information, Papaya Global makes no guarantees of any kind. Papaya Global reserves the right to change the content of this site at any time without prior notice. Papaya Global is not responsible for any third party material that can be accessed through this Web site. The materials contained on this Web site are the copyrighted property of Papaya Global unless a separate copyright notice is placed on the material. Papaya Global grants each user a non-exclusive, non-transferable license to access and download, display and print one copy of the content of this Web site on a single computer solely for internal, business use, provided that the user does not modify the site content in any way and that all copyright and other notices displayed on the site content are retained. Other reproduction, distribution, republication and re-transmission of materials contained within this Web site require Papaya Global’s prior permission.