Guide to Social Security Contribution Levy (SSCL) – Sri Lanka

What is SSCL?

The Social Security Contribution Levy (SSCL) is a 2.5% tax on the liable turnover of businesses. It was introduced via the SSCL Act No. 25 of 2022 and came into effect on 1st October 2022.

Who Needs to Pay SSCL?

SSCL applies to:

• Importers of goods
• Manufacturers
• Service providers
• Wholesalers and retailers

Note: Importers are liable for SSCL at the point of import with no turnover threshold.

Current Registration Thresholds (Effective from 01 Jul 2026)

A business must register for SSCL if:

• Quarterly turnover exceeds Rs. 9 million, or
• Turnover exceeds Rs. 36 million in any 4 consecutive quarters

Registration must be made within 15 days of the date the turnover exceeds, or is likely to exceed, either figure.

These thresholds were lowered by the Social Security Contribution Levy (Amendment) Act, No. 10 of 2026, certified on 9 April 2026.

Threshold history

Guides still quoting Rs. 15 million or Rs. 120 million are out of date.

SSCL Rate & Liable Turnover Calculation

These percentages are the Second Schedule to the Social Security Contribution Levy Act No. 25 of 2022. Note the direction of the two wholesale rows: a registered distributor selling for a Sri Lankan manufacturer is at 25%, and everything else in wholesale or retail is at 50%.

SSCL is charged at 2.5% of liable turnover. Multiply your turnover for the period by the liable turnover percentage for your category, then apply 2.5%.

Exemptions (As of 2024)

Certain articles and services are exempt from SSCL.

Exempt Articles:

• Exported goods
• Fertilizer, petroleum, LP gas
• Pharmaceuticals
• Equipment for differently-abled persons
• Imported motor vehicles liable to Excise Duty
• Rough gems imported for re-export
• Goods sold at duty-free shops
• Rice from local paddy

Exempt Services:

• Electricity (except by licensed distributors)
• Medical and water supply services
• Passenger/goods transport
• Life insurance
• Government and Central Bank services
• Services by registered Air Transport Sales Agents

Exemptions added by Amendment Act No. 24 of 2025

Certified on 17 December 2025 and notified in IRD notice SEC/PN/SSCL/2026-01:

• Wholesale or retail sale of petrol, diesel or kerosene, exempt from 1 July 2025.
• Services provided in relation to international transportation by container terminal operators, exempt from 17 December 2025.
• Financial services liable to VAT at 20.5% under Chapter IIIA of the Value Added Tax Act No. 14 of 2002 are exempt from SSCL.

Motor vehicles - what changed on 1 May 2026

The Social Security Contribution Levy (Amendment) Act, No. 10 of 2026, certified on 9 April 2026, made two changes to motor vehicles from 1 May 2026, and they pull in opposite directions:

• The exemption on the import of motor vehicles (Item 25 of Part IA of the First Schedule) was terminated. Importing a motor vehicle is now liable to SSCL at the point of importation.
• A new exemption was introduced (Item 7 of Part IB of the First Schedule) for the wholesale and retail sale of any motor vehicle in Sri Lanka.

So the levy moved from the showroom to the port. A vehicle dealer selling locally is exempt; the importer pays at import.

Payment and Filing

• Monthly payments: Pay by the 20th of the following month
• Quarterly returns: Submit by the 20th of the month after each quarter ends

SSCL Tax Type Code & Payment Period Codes

When making SSCL payments, it's essential to use the correct Tax Type Code and Payment Period Code.

✅ Tax Type Code for SSCL: 32

📅 Payment Period Codes The Payment Period Code is a five-digit number representing the tax period for which the payment is made. It follows this format:

Format: YYQMM

• YY = Last two digits of the year (e.g., 25 for 2025)
• Q = Quarter number (1, 2, 3, or 4)
• MM = Month number within that quarter (01, 02, 03)

For example, for January 2025, the Payment Period Code is 25101, where:

• 25 denotes the year 2025
• 1 indicates the first quarter
• 01 represents January

Penalties for Non-Compliance

• 10% penalty on late payments
• 2% interest per month on the outstanding amount
• Maximum penalty capped at 100% of tax due

De-registration Option (Effective 01 Jul 2026)

If the aggregate turnover for 4 consecutive quarters does not exceed Rs. 36 million, businesses can apply for cancellation of SSCL registration. Before 1 July 2026 the equivalent figure was Rs. 60 million.

Key Dates to Remember

• 1 Oct 2022: SSCL became effective
• 8 Sep 2023: New exemptions introduced
• 1 Jan 2024: Registration threshold lowered to Rs. 15M/quarter
• 1 May 2026: Import of motor vehicles became liable; wholesale and retail sale of motor vehicles in Sri Lanka became exempt
• 1 Jul 2026: Registration threshold lowered again to Rs. 9M/quarter or Rs. 36M over 4 quarters
• 20th of each month: Monthly payment deadline
• 20th of Jan/Apr/Jul/Oct: Quarterly return deadlines