APIT — Advance Personal Income Tax — is Sri Lanka's pay-as-you-earn income tax on employment income. Your employer is legally required to withhold it from your monthly salary and remit it to the Inland Revenue Department (IRD); it never reaches your bank account, so it appears as a deduction on your payslip.

The system is 'withholding at source': the tax you see on your payslip is an advance on your final annual income tax liability. At the end of the year of assessment (April–March), the tax withheld is credited against your tax liability, so most employees who only have employment income never need to file a return.

Before any tax is calculated, every taxpayer receives a personal relief of Rs 1,800,000 per year — Rs 150,000 per month — under the Inland Revenue (Amendment) Act No. 2 of 2025, effective 1 April 2025. The employer applies this monthly relief first (IRD APIT Table 01), then taxes only the balance.

Practical meaning: a monthly salary of Rs 150,000 or less pays zero APIT. A Rs 200,000 salary pays tax on Rs 50,000 of monthly taxable income — and no more.

The remaining annual taxable income is taxed progressively, meaning each portion is taxed at its own rate — not the whole amount at the top rate:

6% on the first Rs 1,000,000 of taxable income; 18% on the next Rs 500,000; 24% on the next Rs 500,000; 30% on the next Rs 500,000; 36% on everything above Rs 2,500,000 taxable income.

Monthly salary Rs 250,000 → annual income Rs 3,000,000. Minus relief Rs 1,800,000 → taxable income Rs 1,200,000.

Tax: 6% × Rs 1,000,000 = Rs 60,000, plus 18% × Rs 200,000 = Rs 36,000 → annual tax Rs 96,000 → monthly APIT Rs 8,000. That is the figure IRD's own examples produce, and the one this site's calculator shows for that salary.

A Rs 400,000 salary works the same way: taxable Rs 3,000,000, tax = 60,000 + 90,000 + 120,000 + 150,000 + 180,000×0.36… the calculator walks through every slab so you can see each amount.

Unlike in some countries, employee EPF contributions do not reduce your taxable salary for APIT. Tax is charged on your gross monthly emoluments minus the relief — the deduction of Rs 8,000 EPF does not lower the tax base.

EPF/ETF, pension contributions, loan-repayments and insurance are all paid out of your after-tax salary in the usual payroll order: EPF first, then APIT on the gross, then the smaller deductions.

A bonus, 13th-month payment or other one-off payment is not added to your monthly slabs retroactively. It is taxed at a flat rate (12% in this version) in the month it is paid — separate from your progressive APIT. See the Bonus / lump-sum tax tool.

Terminal benefits (your EPF lump sum at retirement) are handled differently again: 0% tax up to Rs 10,000,000, 6% on Rs 10–20 million and 12% above that (Y/A 2025/26).

Use the APIT year tracker to see whether what you have paid so far this tax year matches what is due, the Take-home pay pages for ready-made breakdowns at common salaries, and the main calculator for your exact allowances and deductions. Estimates only — always verify with your payroll office.