Understanding Your Payslip in Sri Lanka: Basic, Allowances, EPF, ETF and Deductions

18 Oct 2026

Your first salary is exciting, but the payslip that comes with it can be confusing. Why is the amount in your bank account smaller than the salary in your offer letter? What is the difference between "gross" and "net"? Who pays EPF, and why does ETF not appear as a deduction? This guide walks through a typical Sri Lankan payslip so you can read your own with confidence and spot mistakes early.

The two big numbers: gross and net

Gross pay is everything you earned in the month before anything is taken out: basic salary, allowances, overtime and any incentives. Net pay (sometimes called "take-home pay") is what is actually credited to your bank account after deductions. The gap between the two is explained by the deductions section of the slip.

Earnings: what usually appears

• Basic salary – the fixed monthly amount in your contract. This figure matters more than it looks, because EPF, ETF and often gratuity are calculated on it (together with certain allowances, depending on how they are defined).
• Budgetary relief allowance (BRA) – a statutory allowance that many private-sector employers show as a separate line.
• Fixed allowances – transport, fuel, mobile phone, meal or attendance allowances. Some are paid every month; attendance allowances may be reduced if you take no-pay leave.
• Overtime (OT) – extra hours worked, normally shown as hours × rate.
• Incentives or commission – common in sales, banking and BPO jobs. These change from month to month.

Deductions: what is normal

• EPF – employee's share. Under the Employees' Provident Fund Act, the employee contributes a percentage of total earnings (as defined in the Act) each month. Your employer adds its own, larger share on top. Both go to your EPF account at the Central Bank, not to the company.
• Income tax (APIT). If your earnings are above the tax-free threshold, the employer deducts Advance Personal Income Tax and pays it to the Inland Revenue Department. The rates and the threshold are changed by government from time to time, so check the current tables on the IRD website rather than relying on old figures.
• Loan or advance recoveries – salary advances, staff loans or festival advances you agreed to.
• No-pay deductions – for days absent without approved leave.
• Welfare society or union fees – only if you joined.

Why ETF is not a deduction

The Employees' Trust Fund is paid only by the employer. It should never be deducted from your salary. Many payslips show the employer's EPF and ETF contributions at the bottom for information. If you ever see ETF listed under your own deductions, ask HR about it.

A simple example

Imagine a slip that shows a basic salary, a transport allowance and a few hours of overtime. The total of those three is the gross pay. From that, the employee's EPF share and perhaps a small staff-loan instalment are taken off. What remains is the net pay credited to the bank. Separately, at the bottom, the slip notes the employer's EPF and ETF amounts – money that is paid for you but never passes through your hands.

Five things to check every month

1. Your name, employee number and NIC are correct. A wrong NIC can send EPF to the wrong member account.
2. Basic salary matches your appointment letter or latest increment letter.
3. Overtime hours match your own record. Keep a simple note of the hours you work late.
4. Leave and no-pay days are right. One wrongly marked day can reduce both your salary and your attendance allowance.
5. EPF is actually being paid. You can check your EPF balance with the Central Bank's EPF department using your member number and NIC. If contributions are missing for several months, raise it with HR and, if needed, the Department of Labour.

Keep your payslips

Save every payslip – a PDF in a folder or a photo in a dedicated album is enough. You will need recent payslips for bank loans, leasing, credit cards, visa applications and when you negotiate salary in your next job. They are also your evidence if there is ever a dispute about EPF, gratuity or unpaid overtime.

When something looks wrong

Most errors are honest mistakes. Speak politely to HR or the payroll officer, bring your own records, and ask for the correction to be made in the next month's salary. Put the request in an email so there is a written record. If a serious problem continues – for example EPF being deducted but not paid – the Department of Labour is the place to get advice.