Simple way to calculate salary and payroll in Sri Lanka
Managing payroll sounds simple until you actually have to do it from calculating commissions and no-pay deductions to staying compliant with Sri Lanka’s EPF/ETF rules and PAYE taxes, salary management can quickly become a time-consuming and risky task. That’s exactly why Formix is here.
Let Formix do the work.
You focus on growing your business we’ll handle your payroll with accuracy, security, and compliance.
Understanding What Goes Into a Payslip
Every payslip tells a story, one of hard work, policy, and precision. A standard payslip in Sri Lanka includes:
- Company name
- Full name of the employee
- Employee number / EPF number
- Designation
- NIC number (optional)
Salary breakdown:
- Basic salary
- Allowances
- Commissions (if any)
- Reimbursements (travel, etc.)
- No-pay deductions
- Advances
- EPF/ETF deductions
- APIT/PAYE taxes
- Net salary (take-home)
- Employer & employee
- EPF/ETF contributions
- Employee signature for confirmation
With Formix, you don’t need to build these from scratch. We prepare accurate, fully compliant payslips, automated, consistent, and ready for audit.
How Salaries Are Calculated
Before you deduct, you must add.
Total Salary = Basic Salary + Allowances + Commissions + Reimbursements
Then deduct:
- EPF (8% employee)
- ETF (3% employer)
- PAYE / APIT (if applicable)
- Salary advances
- No-pay leave
Formix uses smart payroll systems to handle all of this automatically, saving you hours and eliminating human error.
No-Pay Leave Deductions
Sometimes employees need to take unpaid leave. When this happens, salary is reduced accordingly.
Example:
If an employee earns LKR 60,000 per month and takes 3 days of no-pay leave (using a 30-day cycle):
- Daily Rate = LKR 60,000 / 30 = LKR 2,000
- Deduction = LKR 2,000 x 3 = LKR 6,000
- Adjusted Salary = LKR 54,000
Formix takes care of this automatically, so you never have to calculate it manually again.
Payroll Reports – Compliance Starts Here
Government regulations require every employer to maintain accurate payroll records. This means:
- Monthly salary reports
- Breakdown of EPF/ETF contributions
- PAYE/APIT details
- Staff audit trails
Messy reports? Non-compliance? Risky.
With Formix, all your payroll records are ready for inspection, organized, consistent, and 100% audit-proof.
EPF & ETF – What You Must Know
You are legally obligated to contribute:
EPF:
- 8% from employee
- 12% from employer
ETF:
3% from employer
Included in EPF/ETF calculations:
- Basic salary
- Allowances (like food, transport, living)
- Holiday payments
- Payments for working on weekends/Poya/public holidays
- Not included: Overtime
Letting Formix handle your EPF/ETF ensures timely payments, proper calculation, and zero penalty risk.
Why In-House Payroll Can Cost You More Than You Think
Many businesses start by managing payroll internally. But here’s what you’re really facing:
- Expensive payroll talent or repeated training costs
- Manual errors in deductions, taxes, and contributions
- Delays in processing salaries = unhappy staff
- Data breaches or accidental leaks
- Knowledge gaps when staff resign
With Formix, you get access to a professional team, proven systems, and bank-grade data protection, without the overhead.
Why You Should Let Formix Handle Your Payroll
You have a business to run. Your time is valuable. Your data is sensitive. Payroll is not something to “try and figure out” each month.
Let Formix manage your end-to-end payroll process. Here’s why it works:
- Full Automation – From payslips to EPF filing
- Dedicated Experts – Real Sri Lankan payroll pros
- Confidentiality Guaranteed – We take data protection seriously
- No Errors, No Delays – Just accurate, on-time payments
- APIT / PAYE compliance made easy
- Real-time support whenever you need it
Whether you’re a startup or scaling up, Formix gives you payroll confidence backed by local knowledge and modern systems.
Frequently Asked Questions (FAQs)
Yes! We provide digital or printable payslips with every salary cycle, tailored to your company’s structure.
Absolutely. We’ll register your company and your employees and handle the monthly payments to the Central Bank.
No problem. We include commissions, performance bonuses, and allowances seamlessly in our salary breakdowns.
Yes 100%. Our systems and experts stay updated with every tax, EPF, ETF, and labor rule change.
We use secure systems with limited access and encrypted data to protect your payroll information.
Yes. We’ll help you migrate smoothly without disrupting employee payments or records.
Let Formix Do It.
Stop spending your valuable time on repetitive payroll tasks. Let Formix manage your payroll, contributions, tax deductions, and reports with precision and peace of mind.
Your team works hard. Let us handle the math.
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Nishantha Piento,
Rohana Waduge
Working with Formix was a game-changer for our company. Their HR support is efficient, reliable, and tailored to our industry needs. We're extremely satisfied with their service.
Shing Kwan,
Tomas Gorny,
The recruitment solutions provided by Formix were outstanding. Their expertise helped us streamline our HR operations, saving both time and money. Highly recommended!
Nishantha Piento,
Finding the right talent has always been a challenge, but Formix made it easy. Their attention to detail and professionalism set them apart. We look forward to a long-term partnership!
Rohana Waduge
Shing Kwan,
The recruitment solutions provided by Formix were outstanding. Their expertise helped us streamline our HR operations, saving both time and money. Highly recommended!
Tomas Gorny,
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Sri Lanka.
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Tel : +9471 798 5045
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