Loading...
Loading...
Sri Lanka taxes individuals on a progressive basis: different slices of your taxable income are taxed at different rates, and you only pay the higher rate on the slice that falls inside that slab — not on everything below it.
| Taxable income slab | Rate |
|---|---|
| First Rs. 1,000,000 | 6% |
| Next Rs. 500,000 (1,000,001 – 1,500,000) | 18% |
| Next Rs. 500,000 (1,500,001 – 2,000,000) | 24% |
| Next Rs. 500,000 (2,000,001 – 2,500,000) | 30% |
| Balance above Rs. 2,500,000 | 36% |
These rates apply to taxable income — your total income minus the Rs. 1,800,000 personal relief and any qualifying payments. Final WHT income like dividends and bank interest is excluded from this calculation entirely.
The Inland Revenue Amendment Act No. 2 of 2025 made two notable changes to the schedule:
Combined with the personal relief increase from Rs. 1,200,000 to Rs. 1,800,000, the net effect on most middle-income taxpayers is a lower effective tax rate. High-income taxpayers see less benefit because the 36% bracket still applies to anything above Rs. 2,500,000 of taxable income.
Common follow-ups on this topic.
Yes. The Inland Revenue Amendment Act No. 2 of 2025 removed the 12% bracket entirely and widened the 6% bracket from Rs. 500,000 to Rs. 1,000,000. The schedule jumps directly from 6% to 18% with no intermediate step.
In YoA 2024/2025 the schedule was 6% on the first Rs. 500,000, 12% on the next Rs. 500,000, 18%, 24%, 30%, and 36% — six brackets. In YoA 2025/2026 the 12% bracket was removed and the 6% band was widened to Rs. 1,000,000, giving a five-bracket schedule.
The 36% rate applies to taxable income above Rs. 2,500,000. After deducting the Rs. 1,800,000 personal relief, that means total income above roughly Rs. 4,300,000 before any other deductions enters the 36% slab on the portion above Rs. 2,500,000 of taxable income.
No. Foreign income earned by Sri Lankan residents through a Sri Lankan bank has its own concessionary schedule: 6% on the first Rs. 1,000,000 after personal relief, then 15% on the balance. The standard 36% top rate does not apply to qualifying foreign income.
Each slice of income is taxed at its own rate. Only the portion of income that falls within a higher slab is taxed at that higher rate. A taxpayer in the 36% bracket still pays just 6% on their first Rs. 1,000,000 of taxable income, not 36% on the whole amount.
Taxable handles personal relief, slabs, quarterly instalments, WHT, and APIT credits automatically as you record transactions.
Verified against the Inland Revenue Act No. 24 of 2017 (as amended by Amendment Act No. 2 of 2025). Last reviewed .