Before you start

A Taxpayer Identification Number (TIN) from the Inland Revenue Department
Employment or Sri Lankan-source income
A local bank account

Step-by-step

1
Register for a TIN
Issued by the Inland Revenue Department and required for employment, property and most formal financial activity.
OnlineWho: You
2
Understand the April-to-March year
Sri Lanka's year of assessment runs 1 April to 31 March. Aligning your expectations to this rather than a calendar year avoids a lot of confusion at filing time.
OnlineWho: You
3
Employees: APIT is withheld at source
Advance Personal Income Tax is deducted by your employer, much like PAYE. With a single employment and no other income, filing is usually straightforward.
Via employerWho: Your employer
4
Check your personal relief is applied
The first LKR 1.8 million a year — LKR 150,000 a month — is relieved. Confirm your employer is applying it, particularly if you started mid-year.
Via employerWho: You
5
File your return after the year end
Returns are filed with the Inland Revenue Department following the 31 March year end.
OnlineWho: YouAnnually after 31 March

Documents you’ll need

TIN
Employment contract and payslips
Bank account details
Records of other Sri Lankan-source income

Things most newcomers don’t know

The personal relief rose by half on 1 April 2025 and the 12% band was abolished.

Relief went from LKR 1.2 million to LKR 1.8 million a year, and the old 12% bracket was removed. This meaningfully cut the burden on middle incomes, and it means any salary calculator or guide written before April 2025 overstates your tax. Check the date on anything you're using to model an offer.

Source: Sri Lankan 2025/26 tax changes; Inland Revenue Department

The tax year is April to March, which trips up almost everyone.

Sri Lanka's year of assessment runs 1 April to 31 March. Arriving in, say, October means your first year of assessment is a six-month stub, which affects how the annual relief applies and how your APIT is calculated. Expect the first year's numbers to look odd.

Source: Inland Revenue Department — year of assessment

Digital Nomad Visa holders should get their residency position advised, not assumed.

The visa is new and paid from abroad, but tax residency turns on presence and source rules rather than on visa category. On a programme launched in February 2026 there is limited settled practice, so this is a case for local advice rather than inference — particularly if you stay across a full year of assessment.

Source: Inland Revenue Department; Digital Nomad Visa launched February 2026

The 36% top rate arrives at a low income by international standards.

The bands are narrow — LKR 1 million then three LKR 500,000 steps — so a professional salary reaches the top marginal rate quickly. Sri Lanka is inexpensive to live in but not a low-tax jurisdiction for a well-paid local employee, which is a different proposition from being paid from abroad.

Source: Inland Revenue Department — personal income tax rates

Common mistakes to avoid

Using a tax calculator written before April 2025 — the relief rose and a bracket was abolished.
Assuming a January-to-December tax year.
Assuming a Digital Nomad Visa automatically puts you outside Sri Lankan tax without advice.
Not checking your employer is applying the full LKR 1.8 million personal relief.

Some of this may be out of date. Spotted something inaccurate? Help us keep it right for the next newcomer.