The Minimum Wage Just Went Up — Is Your Payroll Ready?

If your payroll still carries any employee below Rs. 30,000 a month, you're no longer compliant. Under the National Minimum Wage of Employees (Amendment) Act, No. 11 of 2025, Sri Lanka's national minimum wage for private sector employees rose from Rs. 27,000 to Rs. 30,000 per month, effective 1 January 2026 — with the daily minimum increasing from Rs. 1,080 to Rs. 1,200.

For most payroll teams, this isn't just a number to update in one field. Three details catch employers off guard.

Three Details Employers Often Miss

  1. It's a consolidated figure. The minimum wage is now a consolidated statutory amount — allowances such as the Budgetary Relief Allowance (BRA) that were previously paid separately are now incorporated into the base wage. A structure of, say, Rs. 26,000 basic plus a Rs. 4,000 allowance needs reviewing, not just a top-up to the total.
  2. Contract and outsourced staff count too. The obligation applies to every employer — including both immediate and ultimate employers — even where employees are engaged through intermediaries or contractors, across all industries and services.
  3. Wage Boards may set a higher floor. The national minimum doesn't override higher rates fixed by Wages Boards or collective bargaining agreements. Sectors like apparel, hotels, and plantations should check their applicable board rates, not just the national figure.

Quick Compliance Check

Before your next pay run, it's worth running through this checklist:

  • Run a report of all employees with gross monthly earnings below Rs. 30,000
  • Review basic + allowance structures where the basic falls below the floor
  • Check daily-paid and part-time staff against the Rs. 1,200/day rate
  • Confirm contractor and agency workers are receiving the revised wage
  • Remember the knock-on effect: raising basic salaries increases your EPF (12%) and ETF (3%) contributions too

How AccSoft Payroll Handles It

In AccSoft Payroll, a simple salary-range filter surfaces every affected employee in seconds. Once salaries are adjusted, revised scales flow automatically into EPF, ETF, and APIT calculations from the very next pay run — no manual recalculation, no spreadsheets.

Because employee records for payroll and statutory reporting are closely linked, it's also worth keeping your employee TIN and RAMIS records up to date at the same time — the two often get reviewed together.

A minimum wage increase is a good moment to review your whole payroll setup, not just one number — allowance structures, contractor pay, and statutory contributions all move together.

Frequently Asked Questions

What is the minimum wage in Sri Lanka in 2026?

From 1 January 2026, the national minimum wage is Rs. 30,000 per month or Rs. 1,200 per day, up from Rs. 27,000 and Rs. 1,080, under the National Minimum Wage of Employees (Amendment) Act, No. 11 of 2025.

Does the Rs. 30,000 minimum include allowances?

Yes. The minimum wage is now a consolidated statutory amount — earlier allowances like the Budgetary Relief Allowance are absorbed into the base wage rather than paid on top. Splitting a lower basic plus allowances to reach Rs. 30,000 needs careful review against the amended Act.

Does the minimum wage apply to contract and agency workers?

Yes. Compliance applies to both immediate and ultimate employers, even when workers are hired through intermediaries or contractors, across all industries and services.

What if my industry's Wages Board rate is higher?

The higher rate applies. The national minimum wage does not override higher rates set by Wages Boards or collective agreements — it's a floor, not a ceiling.

Do EPF and ETF apply on the increased wage?

Yes. EPF (employer 12%, employee 8%) and ETF (3%) are calculated on total monthly earnings with no salary cap, so a salary increase to meet the minimum wage raises your contribution costs proportionally.

Are part-time employees entitled to the full Rs. 30,000?

Part-time wages are calculated proportionally to hours worked — a worker doing half the standard hours would be entitled to roughly half the monthly minimum, and daily-paid workers must receive at least Rs. 1,200 per day.