How Salary Is Calculated in Sri Lanka

1. Shop & Office Employees

For employees covered by the Shop & Office Employees Act, salary calculation can include:

• Basic salary
• Allowances
• Overtime
• Poya and public holiday work
• No-pay leave
• EPF
• ETF
• Loans and salary advances
• Other approved deductions

Example

Suppose an employee has:

If the employee's applicable EPF earnings are Rs. 35,000:

Employee EPF = Rs. 35,000 × 8% = Rs. 2,800

If the employee has a Rs. 2,000 loan deduction:

Net Salary = Rs. 36,875 − Rs. 2,800 − Rs. 2,000 = Rs. 32,075

MyInvoice Payroll keeps these calculations separate and shows the complete breakdown on the payslip.

2. Overtime Calculation

For a monthly-paid Shop & Office employee, the standard overtime calculation can be based on the applicable ordinary hourly rate and statutory overtime multiplier.

For example:

Monthly salary = Rs. 30,000

Hourly rate = Rs. 30,000 ÷ 30 ÷ 8 = Rs. 125

Using an overtime rate of 1.5 × the ordinary hourly rate:

OT rate = Rs. 125 × 1.5 = Rs. 187.50 per hour

For 10 hours of overtime:

OT payment = 10 × Rs. 187.50 = Rs. 1,875

MyInvoice Payroll automatically calculates approved overtime according to the employee's configured payroll rules.

3. Wages Board Employees

Some employees are covered by a Wages Board applicable to their particular trade or industry.

For these employees, salary calculations may depend on the applicable Wages Board, including:

• Minimum wage
• Daily or monthly wage rates
• Overtime rates
• Attendance and working days
• Allowances
• Holidays
• Other conditions applicable to the relevant trade

For example, if the applicable Wages Board minimum daily wage is Rs. 1,500 and an employee works 26 payable days:

Basic wage = 26 × Rs. 1,500 = Rs. 39,000

If the employee has Rs. 3,000 in applicable allowances:

Gross earnings = Rs. 39,000 + Rs. 3,000 = Rs. 42,000

The actual calculation depends on the Wages Board and the current statutory rates applicable to the employee's trade.

MyInvoice Payroll is designed to keep these rules configurable so that different industries can use their applicable wage rates and conditions.

4. EPF and ETF

For employees covered by EPF, MyInvoice Payroll can calculate the employee and employer contributions separately.

For example, if applicable EPF earnings are Rs. 30,000:

Employee EPF:

Rs. 30,000 × 8% = Rs. 2,400

Employer EPF:

Rs. 30,000 × 12% = Rs. 3,600

Employer contributions are not deducted from the employee's net salary.

ETF is also calculated separately as an employer contribution according to the applicable statutory rate.

5. From Attendance to Payslip

MyInvoice Payroll brings everything together:

Attendance → Leave → Overtime → Earnings → EPF/ETF → Deductions → Net Salary → Payslip

You can manage salary calculations, attendance, overtime, loans, advances, leave and payroll reports from one place.