Free Tool
Gratuity Liability Estimator
Calculate the statutory gratuity payment owed to employees under Sri Lanka's Payment of Gratuity Act. Essential for HR planning and budgeting.
Gratuity Liability Estimator
Minimum 5 years required for gratuity eligibility
Understanding Gratuity in Sri Lanka
Under the Payment of Gratuity Act No. 12 of 1983, all employees who have completed 5 or more years of continuous service are entitled to a gratuity payment upon termination, resignation, or retirement. The statutory minimum is calculated as half a month's salary for each year of completed service.
Employers with 15 or more employees are legally required to pay gratuity. The payment must be made within 30 days of the employee's last working day. Failure to pay can result in legal action through the Labour Tribunal.
For businesses managing multiple employees, tracking gratuity liabilities is essential for financial planning. Jaffna Business Advisory connects you with qualified Chartered Accountants who can set up proper provision accounting and HR compliance frameworks.
Executive Q&A
Direct answers for founders and counsel
Who is eligible for statutory gratuity in Sri Lanka?
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Under the Payment of Gratuity Act No. 12 of 1983, any workman employed in an enterprise with 15 or more employees who has completed 5 or more years of continuous service is legally entitled to gratuity upon resignation, retirement, or termination.
What is the formula for calculating gratuity in Sri Lanka?
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For monthly-rated employees, statutory gratuity equals half (1/2) of the employee's last drawn monthly wage or salary multiplied by the total number of completed years of service.
Within how many days must an employer pay gratuity in Sri Lanka?
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Gratuity must be paid within 30 days of the termination or resignation date; failure to pay on time incurs mandatory statutory surcharges ranging from 10% to 30%.
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