A guide for employers
EPF and ETF: what an employer must do each month
Every employer with eligible staff pays into two funds each month. The amounts and the deadline are straightforward, and missing them is both common and avoidable.
What you pay
The rates: 8%, 12% and 3%.
For the Employees' Provident Fund you deduct 8 per cent of the employee's total monthly earnings from their pay and add 12 per cent from the company, so 20 per cent goes into the employee's EPF.
You then pay the Employees' Trust Fund at 3 per cent of total earnings, entirely from the company. The employee contributes nothing to the ETF.
When it is due
The last working day of the following month.
The contribution for each wage month is due by the last working day of the month that follows it.
Retain the payment record and the fund's acknowledgement for each month. If a contribution is ever questioned, the acknowledgement is the proof that it was paid.
If a payment is late
How the surcharge is calculated.
A late contribution carries a surcharge on the amount owed, and the rate rises the longer it remains unpaid.
- 1 to 10 days late: 5 per cent.
- 10 days to 1 month late: 15 per cent.
- 1 to 3 months late: 20 per cent.
- 3 to 6 months late: 30 per cent.
- 6 to 12 months late: 40 per cent.
- More than 12 months late: 50 per cent.
Worked example. On a month's contribution of Rs 100,000 paid two months late, the 20 per cent band adds Rs 20,000, so Rs 120,000 falls due. Left unpaid for more than a year, the same contribution carries a 50 per cent surcharge, an extra Rs 50,000.
This guide is general information for employers, not legal advice, and does not create a client relationship. Sri Lankan law and the applicable rates change, and how they apply depends on your circumstances. Confirm your position with a qualified adviser before acting.