ECONOMYNEXT – Sri Lanka’s tax office has detailed pay-as-you earn tax deductible from employees, after the threshold was sharply raised by the new administration.
Employees earning over 250,000 rupees a month are liable to PAYE in changes announced by the new administration where the legal changes are pending.
The Depart of Inland Revenue has instructed employees to deduct a 6 percent PAYE tax for total income of over 1.5 million for the current quarter less 45,000 rupees.
For employment income of over2.25 million the PAYE tax is 12 percent les 135,000 rupees.
For income of over 2.25 million the tax is 18 percent less 270,000 rupees.
Employment income is salary plus allowances and benefits. It includes annual bonuses.
A vehicle (less than 1.8 litre) provided by the company is deemed to be 40,000 rupees with petrol and 10,000 is added for a driver if any.
A vehicle more than 1.8 litres is deemed to be 65,000 rupees and another 10,000 for the driver.
If salary is less than 200,000 the rent of any houses provided to an employee would be deemed to be 12.5 percent of the salary or 20,000 whichever is less.
If the salary is over 200,000 it will be 20,000 rupees or 12.5 percent, whichever is less.
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Private sector workers who get employee shares will have to pay tax on the benefit less any cash contributed. However state workers do not have to pay any tax on permits given to import cars.
Any income from a second employer will be taxed at 5 percent if it is below 50,000 rupees and 10 percent if it is higher.