Basic Facts

The Democratic Socialist Republic of Sri Lanka (formerly Ceylon) lies in the Indian Ocean, southwest of the Bay of Bengal, and southeast of the Arabian Sea. The island country is separated from the Indian subcontinent by the Gulf of Mannar and the Palk Strait. It covers 65,600 square kilometers, largely made up of coastal plains in the north, and hills and mountains in the south-central interior. The main industries are the processing of agricultural produce largely rubber, tea, coconuts, and tobacco. Sri Lanka’s top trading partners are India, China, and the United States. A leading tea producer and exporter, Sri Lanka also exports apparel, coffee, and spices. The services sector is the leading employer (46%), followed by industry (30%), and agriculture (24%).


*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Sri Lanka.

Capital :
Colombo; Sri Jayawardenepura Kotte.
Currency :
Sri Lankan rupee (Rs, LKR)
Languages spoken :
Sinhala, Tamil
Population :
22.17 million (2021 est.)
Minimum wage 2023 :
LKR 16,000 per month
Cost of Living index :
$$ (119 of 139 countries)
Payroll Frequency :
VAT - standard rate :
GDP - real growth rate :
3.7% (2021 est.)

Statutory Holidays

The national holidays mentioned below are valid for the year 2024.

Holiday Name
Extra Information
January 15
Tamil Thai Pongal Day
January 25
Duruthu Full Moon Poya Day
February 4
National Day
February 24
Navam Full Moon Poya Day
March 8
Mahasivarathri Day
March 24
Madin Full Moon Poya Day
March 29
Good Friday
April 10
Id Ul-Fitr
April 12 -13
Sinhala & Tamil New Year Holiday
April 23
Bak Full Moon Poya Day
May 1
May Day
May 23
Vesak Full Moon Poya Day
May 24
Day following Vesak Full Moon Poya Day
June 17
Id Ul-Alha
June 21
Poson Full Moon Poya Day
July 20
Esala Full Moon Poya Day
August 19
Nikini Full Moon Poya Day
September 16
Milad un-Nabi
September 17
Binara Full Moon Poya Day
October 17
Vap Full Moon Poya Day
October 31
November 15
Ill Full Moon Poya Day
December 14
Unduvap Full Moon Poya Day
December 25
December 25 Christmas Day

Contract Sharing Time

The approximate time for sharing the contract with an employee in Sri Lanka is 6 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.

NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.

What You Need To Know

  • The law does not deal with notice periods relating to individual dismissals. Notice periods for individual dismissals must be stipulated in the contract of employment.
  • Labor laws do not provide a statutory provision for the duration of the probationary period.
  • There is no statutory provision for parental and paternity leave.
  • Colombo is the executive and Judicial Capital while Sri Jayawardenepura Kotte is the legislative Capital.

Labor Conditions

Working Hours

The normal working hours are eight hours per day and are not to exceed 45 hours per week. One-hour rest breaks must be given between the hours of 11.00am and 2.00pm where employees work during the daytime.



Overtime is not to exceed 12 hours in any one week. Overtime pay is 150% of the rate of ordinary pay.

Probation Period

There is no legislated probation period. The Act provides for the employer to clearly state the probation period, the terms governing it, and the circumstances under which the employee may be terminated during the probation period. In practice, probation periods are six months to a year.


Termination Notice Period

There is no statutory notice period for individual dismissals. Individual notice periods, or payments in lieu of notice of dismissal, are stipulated in the contract of employment.

For collective dismissals, at least one month’s prior notice applies prior to retrenching employees that have served the employer for at least one year.

Leave / Time Off

Annual Leave

During the first year, an employee accumulates the following annual leave depending upon the time of commencement of their contract of employment:

Employment Commencement Leave Entitlement
On or after January 1 but before April 1 14 days
On or after April 1 but before July 1 10 days
On or after July 1 but before October 1 7 days
On or after October 1 but before December 31 4 days

From the second year of employment onward, after completing 12 months of continuous service, an employee is entitled to 14 days of paid annual leave, of which no less than seven must be consecutive days.

Sick Leave

A person who has completed a year of continuous service is entitled to sick leave of no more than seven days with full remuneration. The employer is responsible for paying  the employee during sick leave.

Parental Leave

There is no statutory provision for parental leave.


Maternity Leave

A female employee is entitled to 12 weeks of maternity leave, two weeks before and 10 weeks immediately after confinement if confinement results in the issue of a live child.

If confinement does not result in the issue of a live child, the employee is entitled to four weeks’ leave after confinement. 


Paternity Leave

There is no statutory provision for paternity leave.

Other Types of Paid Leave

Casual leave

An employee that has been with the employer for 12 months is entitled to seven days of casual leave in a 12 month period. Casual leave is normally availed from one half day to one or more days at a time. Leave is taken on account of private business, ill-health, or other reasonable causes.

Unpaid Leave

There is no statutory provision for unpaid leave in Sri Lanka.

Statutory Benefits


Benefits Employer Contributions
Employee Provident Fund 12%
Employee Trust Fund 3%
Social security contributions on annual turnover exceeding LKR 120 million 2.5% (effected from April 1, 2022)

Health Insurance

Access to health services in Sri Lanka is through two programs:

  • The universal system, which offers medical benefits, is available for all citizens free of charge through the Shramasuwa Rekawarana Hospitalization Medical Scheme, and has no minimum qualifying period;
  • The employer-liability system, which offers cash benefits, requires an employee to have at least 12 months of continuous employment with the same employer and to provide a medical certificate. An employee receives 100% of their normal earnings for up to seven days a year.

The employer contributes 3% of each employee’s salary (representing the total cost) to the Employees Trust Fund monthly before the last working day of the following month to enable members to access medical benefits.

Other Insurances

Accident Insurance


Liability for work-related accidents rests with the employer. The total cost through either providing benefits directly to employees or paying insurance premiums ranges from 1% to 7.5% of payroll, depending on the assessed degree of risk.

Unemployment Insurance


Under the present social security scheme, there is no protection against unemployment.

Public Pension

The retirement age is 60 years as per the Minimum Retirement Age of Workers Act. The old-age pension is operated under a Provident Fund and Trust Fund system.

The employer contributes 12% of monthly payroll towards the Provident Fund and 3% of monthly payroll towards the Trust Fund.


The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.

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