Gratuity Calculator (Sri Lanka, 2026)
Sri Lanka gratuity = half a month's last drawn salary for each completed year of service (Payment of Gratuity Act No. 12 of 1983, section 6). It is due when the workman has at least 5 completed years with an employer who had 15 or more workmen in the past year, whatever the reason the job ended, and must be paid within 30 days.
· Calculated with AiStaffo
The rules in Sri Lanka
| Law | Payment of Gratuity Act, No. 12 of 1983 (amended by Acts No. 41 of 1990 and 62 of 1992), sections 5, 6, 13 and 20 |
|---|---|
| Who is covered | Workmen of an employer who employed 15 or more workmen on any day in the 12 months before the termination |
| Minimum service | 5 completed years with the same employer |
| Wage used | Last drawn basic or consolidated salary, plus cost-of-living and similar allowances |
| Monthly-rated workmen | Half a month's salary for each completed year of service |
| Other workmen (daily-rated) | 14 days' wages for each completed year of service |
| When paid | On any termination: by the employer, by the workman, on retirement or on death (to the heirs) |
| Deadline | Within 30 days of termination; late payment adds a surcharge of 10% to 30% depending on the delay |
| Forfeiture | Only to the extent of loss caused, if terminated for fraud, misappropriation, wilful damage to property or causing loss of goods |
Worked example
Last salary LKR 120,000 a month (basic + cost-of-living allowance), 8 years and 7 months of service. Only completed years count, so 8 years are used.
120,000 × ½ × 8 = LKR 480,000, payable within 30 days of the last working day.
Employers with fewer than 15 workmen
The Act does not make gratuity compulsory for employers with fewer than 15 workmen. Workers there may still get gratuity under their contract, a collective agreement or a Labour Tribunal award, so check those documents.
Late payment surcharge
If the employer does not pay within 30 days, section 5 adds a surcharge on the gratuity: 10% if up to one month late, 15% up to three months, 20% up to six months, 25% up to a year and 30% after that. The Commissioner of Labour can recover unpaid gratuity and surcharge.
For employers: gratuity is one line of what a role costs
Gratuity, leave, statutory contributions and notice periods all sit on top of salary. Routine back-office roles such as data entry, follow-ups, reconciliations and reporting can be handed to AI workers that carry none of these costs. Book a free automation audit and we will put your own figures on it.
Please note: this calculator follows the published law and common practice as checked on 21 October 2026. It is a guide, not legal advice. Contracts can give more than the legal minimum, and special cases (part-time work, free zones, disputes) can change the figure, so confirm the final amount with your HR team or a lawyer before paying or accepting a settlement.
Questions people ask
How is gratuity calculated in Sri Lanka?
How many years do I need for gratuity in Sri Lanka?
Do I get gratuity if I resign?
Which salary is used for gratuity?
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Does a small business have to pay gratuity?
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