Sri Lanka Finance & Tax Glossary

36 terms you will meet on a Sri Lankan payslip, loan agreement, invoice, deed, or exam result sheet — defined in plain English, linked to the authority that sets the rule, and to the calculator that applies it.

Tax

APITAdvance Personal Income Tax· also called PAYE: The income tax an employer deducts from an employee's salary each month and remits to the Inland Revenue Department. It replaced the old PAYE scheme, and most people still call it PAYE. The employer applies a table published by the IRD, so the deduction is an advance against the employee's final annual liability rather than a separate tax.; Income Tax (APIT) Calculator →Inland Revenue Department - APIT tax tables
Personal relief· also called Tax-free allowance: The slice of employment income that is not taxed at all before the first rate band starts. In the monthly APIT tables the relief is already built into the deduction figures, so an employer applies the table directly rather than subtracting the relief first.; Income Tax (APIT) Calculator →Inland Revenue Department - Income tax
SSCLSocial Security Contribution Levy: A turnover-based levy charged on the liable turnover of businesses above a registration threshold. It matters on an invoice because SSCL is applied before VAT, so VAT is charged on a base that already includes the levy - which is why the two cannot be added as a single combined percentage.; VAT & SSCL Invoice →Inland Revenue Department - Types of taxes
Stamp duty: A duty payable on specified instruments and documents, including certain leases, share transfers, and property-related deeds. It is charged on the document itself rather than on income, so it can apply even where no tax is due.; Inland Revenue Department - Stamp Duty
TINTaxpayer Identification Number: The unique number the Inland Revenue Department issues to a registered taxpayer, whether an individual or a business. It identifies the taxpayer on returns, payments, and correspondence, and is now required for a range of transactions beyond filing itself.; Inland Revenue Department
VATValue Added Tax: A tax charged on the value added at each stage of supplying goods and services, ultimately paid by the final consumer. A business registered for VAT charges it on its sales, reclaims the VAT it paid on its purchases, and remits the difference to the IRD.; VAT & SSCL Invoice →Inland Revenue Department - Value Added Tax
WHTWithholding Tax: Tax deducted at source by the payer rather than paid later by the recipient - most commonly on interest, dividends, rent, and certain service fees. The recipient receives the net amount and is credited with the tax already withheld.; FD & T-Bill Calculator →Inland Revenue Department - Withholding Tax
Year of assessment: The twelve-month period Sri Lankan income tax is calculated over, running from 1 April to 31 March rather than over the calendar year. A rate change announced mid-year usually takes effect from the start of a year of assessment, which is why tax tables are labelled like 2025/2026.; Income Tax (APIT) Calculator →Inland Revenue Department - Income tax

Employment & retirement

CTCCost to Company: The total annual cost an employer carries for an employee, not the amount the employee receives. It adds employer EPF and ETF contributions, gratuity provision, allowances, and benefits on top of gross salary, so CTC is always higher than gross pay and considerably higher than take-home pay.; Cost to Company (CTC) →Department of Labour
EPFEmployees' Provident Fund: Sri Lanka's mandatory retirement savings fund for private-sector and certain public-corporation employees. The employee and the employer both contribute a percentage of earnings each month, the fund credits annual interest, and the balance is withdrawn at retirement or on other qualifying grounds.; EPF & ETF Calculator →Central Bank of Sri Lanka - Employees' Provident Fund
ETFEmployees' Trust Fund: A separate fund from EPF, funded entirely by the employer with no deduction from the employee's salary. It provides a smaller lump sum alongside EPF plus a set of member benefits, and is administered by the Employees' Trust Fund Board rather than the Central Bank.; EPF & ETF Calculator →Employees' Trust Fund Board
Government pension: The monthly payment made to a retired public servant under the government pension scheme, based on final salary and years of pensionable service. Public servants on the pension scheme are outside EPF and ETF, which is why a private-sector retirement projection does not apply to them.; Government Pension →Department of Pensions
Gratuity: A lump sum an employer must pay a qualifying employee on leaving, under the Payment of Gratuity Act, once the employee has completed the required period of continuous service at an employer above the size threshold. It is calculated from the final salary and the length of service, and it is separate from and additional to EPF and ETF.; Gratuity Calculator →Department of Labour - Payment of Gratuity
NICNational Identity Card: The identity document issued to Sri Lankan citizens. The number itself encodes the holder's date of birth and sex - the older ten-character format and the newer twelve-digit format encode them differently, which is why the two look unrelated for the same person.; NIC Decoder →Department for Registration of Persons
Poya day: The monthly full-moon day, a public and bank holiday in Sri Lanka. Because it follows the lunar cycle its date moves each year and occasionally two fall in the same calendar month, so it cannot be predicted from a fixed calendar rule.; Holidays & Poya Days →Sri Lanka public holiday calendar

Banking & borrowing

AWPLRAverage Weighted Prime Lending Rate: The average rate at which commercial banks lend to their most creditworthy corporate customers, published weekly by the Central Bank. Many variable-rate loans are priced as AWPLR plus a fixed margin, so a borrower's instalment moves when AWPLR moves.; Housing Loan Calculator →Central Bank of Sri Lanka - Interest rates
CCPIColombo Consumer Price Index: The index used to measure consumer inflation in Sri Lanka, tracking the price of a fixed basket of household goods and services. It is the figure quoted when inflation is reported, and it is what erodes the real value of a fixed-rate return over time.; Department of Census and Statistics
DBRDebt-to-Income Ratio· also called Debt burden ratio: The share of a borrower's monthly income already committed to debt repayments. Lenders cap it when assessing an application, so DBR usually determines the maximum loan someone can be offered regardless of what they believe they can afford.; Loan Eligibility (DBR) →Central Bank of Sri Lanka
EMIEquated Monthly Instalment: The fixed amount paid each month on a loan, covering both interest and principal. Early instalments are mostly interest and later ones mostly principal, even though the payment itself never changes - which is why paying a loan off early saves less than people expect near the end of the term.; Loan / EMI Calculator →Central Bank of Sri Lanka
Fixed deposit· also called FD: A deposit locked with a bank or finance company for an agreed term at an agreed rate. Interest may be paid monthly or compounded to maturity, and withholding tax applies to the interest, so the advertised rate is not the return actually received.; FD & T-Bill Calculator →Central Bank of Sri Lanka - Interest rates
Flat rate interest: Interest charged on the original amount borrowed for the whole term, regardless of how much has been repaid. A flat rate is roughly half the equivalent reducing-balance rate in effective terms, so a flat rate quoted alongside a bank's reducing-balance rate is not a like-for-like comparison. Common in leasing and hire purchase.; Hire Purchase Calculator →Central Bank of Sri Lanka - Licensed finance companies
LTVLoan-to-Value ratio: The loan amount as a percentage of the value of the asset securing it. The Central Bank sets maximum LTV ratios for certain vehicle and property lending, which fixes the minimum down payment a borrower has to find.; Vehicle Lease EMI Calculator →Central Bank of Sri Lanka - Loan-to-value ratio
PUCSLPublic Utilities Commission of Sri Lanka: The regulator that approves the electricity tariff schedule CEB and LECO bill against. A domestic bill is charged in blocks, with each block of units priced at its own rate plus a fixed charge, which is why consumption crossing into a higher block raises the bill more than proportionally.; Electricity Bill (PUCSL) →PUCSL - End-user tariff decisions
Reducing balance interest: Interest charged only on the outstanding balance, which falls as the loan is repaid. It is the basis of a normal bank loan and is what an EMI schedule assumes.; Loan / EMI Calculator →Central Bank of Sri Lanka
Treasury bill· also called T-bill: Short-term government debt sold at a discount and redeemed at face value, with the difference being the investor's return. Auction yields are published by the Central Bank and are the usual benchmark for comparing a fixed deposit rate against a risk-free alternative.; FD & T-Bill Calculator →Central Bank of Sri Lanka - Treasury bill auction results

Education

Class· also called Honours classification: The degree classification a Sri Lankan university awards on the basis of GPA and its own performance criteria - typically First Class, Second Class Upper, Second Class Lower, or a pass. The GPA thresholds and the additional conditions attached to them are set by each university, not nationally.; Target GPA Estimator →University of Moratuwa - Performance criteria
Cut-off mark: The minimum Z-score at which the last candidate was admitted to a particular course at a particular university in a given year, published district by district. It is the outcome of that year's applications rather than a fixed entry requirement, so it moves from year to year.; University Cut-offs →UGC - Cut-off marks for university admission
GPAGrade Point Average: The credit-weighted average of the grade points earned across all modules taken. Because it is weighted by credits, a high grade in a small module moves the average far less than the same grade in a large one.; GPA Calculator →University Grants Commission
Z-score: A standardised score used to compare G.C.E. Advanced Level results across different subject streams and years. It expresses a candidate's result as a number of standard deviations from the mean for that subject and sitting, so raw marks from different subjects can be ranked on one scale for university admission.; A/L Z-Score →University Grants Commission

Property & land

A-R-PAcres, Roods, Perches: The notation used on Sri Lankan land deeds and survey plans, written as three numbers - for example 1-2-20 meaning one acre, two roods, and twenty perches. One acre is four roods, and one rood is forty perches, so the units do not carry over in tens.; Unit Converter →
Perch: The unit Sri Lankan land is most commonly priced in. One perch is 272.25 square feet, or about 25.29 square metres. Land advertisements quote a price per perch, so comparing two plots means converting both to the same unit first.; Unit Converter →
Rood: A larger land unit equal to 40 perches, or a quarter of an acre. It appears mostly on older deeds and on larger or agricultural plots rather than in urban listings.; Unit Converter →

Trade & business

Break-even point: The sales volume at which total revenue exactly covers total costs, so the business makes neither profit nor loss. It is found by dividing fixed costs by the contribution each unit makes after its own variable costs, which is why cutting price raises the break-even volume faster than it raises sales.; Break-Even Calculator →
CIFCost, Insurance and Freight: The value of imported goods including the purchase price, the insurance, and the freight to bring them to Sri Lanka. Customs duty is assessed on the CIF value converted to rupees, not on the invoice price alone, which is why landed cost exceeds the supplier's quote before any duty is added.; Import Cost Calculator →Sri Lanka Customs - Valuation formula
HS codeHarmonised System code: The international classification number that determines which duty rates apply to a specific imported product. Getting it wrong changes the duty payable, so the tariff line matters as much as the value declared.; Import Cost Calculator →Sri Lanka Customs - Tariff
Margin and markup: Two different ways of expressing the same profit. Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. A 50% markup is a 33% margin, and confusing the two is the most common pricing error in retail.; Retail Margin & Discount →