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

Managing the Employees’ Trust Fund (ETF) for your business is essential to ensure compliance with labor laws and secure employee benefits. This guide simplifies everything you need to know about ETF, from registration to payments and withdrawals.

What is ETF and Who Should Contribute?

Who Must Contribute?

All private sector employers, regardless of the number of employees
Public sector employers whose employees don’t qualify for a government pension
Employers with their own approved Provident Funds

Which Employees are Covered?

All employees – whether permanent, temporary, casual, contract-based, or apprentices
Self-employed individuals and migrant workers can contribute voluntarily

How to Register for ETF?

Unlike EPF, ETF does not require separate registration. Here’s how to start contributing:

Get a Business Registration Number – Register your business with the Labour Department and obtain an employer registration number.
Contact the ETF Board – Request ETF forms and payment instructions.
Make the First Contribution – Once you submit your first payment, your business will be added to the ETF Contributing Employers List.

Note: If you don’t have an EPF number yet, ETF will provide a temporary number for payments until you register with EPF.

How to Calculate and Make ETF Contributions?

Step 1: Calculate the Contribution

Employers must contribute 3% of each employee’s total earnings. This includes:

Basic salary, wages, or fees
Cost of living and other allowances
Food allowances and meal benefits
Commissions and bonuses

Important: Employers must pay this amount from company funds and cannot deduct it from the employee’s salar

Step 2: Submit Payments

Deadline: ETF contributions must be paid by the last working day of the following month. Payment Methods:

Manual Payments: Cheque, cash, or money order at ETF 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 ETF Funds

Employees can withdraw their ETF balance upon leaving their job. Unlike EPF, ETF does not have an age limit for withdrawal.

Employees can withdraw their ETF balance under the following conditions:

Resignation, retirement, or dismissal
Reaching 60 years of age
Migrating for permanent residence
Joining government service with a pension
Permanent disability
Death (claims can be made by family members)

How to Withdraw?

Submit an ETF claim form (available at ETF offices or online).
Attach a bank statement, NIC copy, and proof of employment history.
If the previous employer is unavailable, get certification from the Grama Niladhari and Divisional Secretary.
ETF will process standard claims within 21 working days or urgent claims within 10 days (for cases like medical emergencies, migration, etc.).

Final Checklist for Employers

Obtain a business registration number from the Labour Department.
Ensure 3% ETF contributions are made on time.
Use the correct remittance forms (R1 for 15+ employees, R4 for fewer than 15 employees).
Keep records of contributions and update employee details as needed.
Help employees access their ETF balances and claims.

By managing ETF properly, your company stays compliant with labor laws and ensures your employees receive their benefits without issues.

For more details, visit the ETF Board website.