A Simple Guide to Managing EPF for Your Company in Sri Lanka

The Employees’ Provident Fund (EPF) is a mandatory retirement savings scheme for employees in Sri Lanka. As an employer, ensuring proper EPF management is crucial to compliance and employee financial security. This guide breaks down everything you need to know, from registration to contributions and withdrawals.

What is EPF and Who Should Contribute?

EPF is a compulsory savings fund where both employers and employees contribute a percentage of the employee’s salary.

Who Must Contribute?

  • All private sector employers with at least one employee
  • Public sector employers whose employees don’t qualify for a pension
  • Partnerships, sole proprietorships, and foreign companies

Which Employees are Covered?

  • All permanent, temporary, casual, apprentice, or contract-based employees
  • Directors and partners receiving a salary
  • Employees working on a piece rate or commission basis
  • School students working after hours (above age 14)

Note: Employees working in family-owned businesses don’t require EPF unless an external employee is recruited.

How to Register for EPF?

Every employer must register with EPF within 14 days of hiring the first employee.

Steps to Register:

  1. Fill out Form-D and submit it to the nearest Labour Office or the Commissioner of Labour.
  2. Obtain an Employer Registration Certificate from the Labour Department.
  3. Once registered, your details are added to the EPF database at the Central Bank of Sri Lanka (CBSL).

Documents Required Based on Business Type:

  • Sole Proprietorship: Business registration certificate + owner's NIC copy
  • Partnership: Business registration certificate + NIC copies of all partners
  • Private Limited Company: Certificate of Incorporation + Form 01, 05, 20, or 40 certified by the Company Registrar

How to Calculate and Make EPF Contributions?

Step 1: Calculate the Contribution

Employers must contribute 12% of an employee’s total monthly earnings, while employees contribute 8%. Total contribution per employee = 20% of total monthly earnings

Total earnings include:

  • Basic salary, wages, or fees
  • Cost of living and special allowances
  • Overtime pay
  • Commissions and bonuses
  • Food or meal benefits

Employers must pay 12% from company funds and cannot deduct this from the employee’s salary.

Step 2: Submit Payments

Deadline: EPF contributions must be paid by the last working day of the following month.

Payment Methods:

  • Manual Payments: Cheque, cash, or money order at EPF offices or selected banks.
  • Online Payments: Through banks like BOC, Commercial Bank, People's Bank, Sampath Bank, HNB, etc.
  • Direct Debit: Arrange auto-payments through a commercial bank.

Late payments attract penalties starting at 5% for delays up to 10 days and up to 50% for delays exceeding 12 months.

How Employees Can Claim EPF Funds

Employees can withdraw their EPF balance under the following conditions:

  1. Retirement (Ages 50 for Women, 55 for Men)
    • Submit Form K, a copy of the Birth Certificate, and the B-Card through the employer.
  2. Resignation for Marriage (Women Only)
    • Submit Form K, Marriage Certificate, and a letter from the Grama Niladhari confirming the marriage.
  3. Leaving for Permanent Migration
    • Submit Form K, B-Card, and a copy of the Permanent Residency Visa and Passport.
  4. Total Disability
    • Submit Form M with a medical certificate from a government hospital.
  5. Joining a Pensionable Government Job
    • Submit Form K, B-Card, and an appointment letter confirming government employment.

Processing time: Payments are made via cheque or direct bank transfer through SLIPS.

How to Check EPF Balances?

Employees can track their EPF balance using:

  • Online Portal: Register at www.epf.lk
  • MS: After registration, send EPFBLC <UserName> to 1919
  • Half-Yearly Statement: Sent to employees via the employer

Employers can also register for EPF Online Services to manage payments and employee details digitally.

Special EPF Benefits: Housing Loans & Partial Withdrawals

Housing Loan Facility

Employees can borrow up to 75% of their EPF balance for:

  • Building or buying a house
  • Buying land for construction
  • Settling an existing housing loan

To Apply: Submit an application through the Labour Department.

30% EPF Withdrawal Before Retirement

Employees can withdraw 30% of their EPF balance for:

  • Housing needs (construction, purchase, mortgage settlement)
  • Medical expenses (heart surgery, cancer treatment, kidney transplant, etc.)

To Apply: Submit required documents to the Labour Department.

Final Checklist for Employers

  • Register your company with the Labour Department and obtain an EPF number.
  • Ensure 12% employer and 8% employee contributions are made on time.
  • Use the correct remittance forms (Form C for fewer than 50 employees, e-Return for 50+ employees).
  • Keep records of all contributions and update employee details as needed.
  • Help employees access their EPF balances and claims.

By managing EPF properly, your company stays compliant with labor laws while ensuring your employees secure their retirement savings.

For more details, visit the EPF Department website.

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