EPF & ETF for first-time employers: what every Sri Lankan business must know

The 14-day rule

The moment you hire your first employee, a clock starts: employers must register with the Employees' Provident Fund within 14 days of the first recruitment. Registration is done by submitting Form D to the Department of Labour, after which you receive an EPF employer registration number — two letters for your district plus a serial number.

Each employee must also be registered, using Forms A, B and H, with NIC details entered exactly as they appear on the card. Mismatched NICs are the single most common reason contributions go astray.

What it costs, every month

Contributions are calculated on each employee's gross earnings:

• EPF — 8% deducted from the employee's salary, plus 12% paid by you, the employer.
• ETF — a further 3% paid entirely by the employer.
• Total leaving your account each month: 23% of gross earnings (of which 8% came out of salaries).

Deadlines and surcharges

Contributions for any month fall due by the last working day of the following month — June's contributions are payable by the end of July. Miss it and surcharges kick in on a rising scale that gets steep quickly; persistent default can end in legal action and personal liability for directors.

The practical answer is boring: a fixed monthly routine. Salaries calculated, contributions computed, payment made, proof filed — same week, every month.

Common first-employer mistakes

• Registering late because 'we're only two people' — the 14-day rule applies from employee number one.
• Calculating contributions on basic salary when allowances should be included in earnings.
• Forgetting ETF because it's a separate fund with a separate payment.
• Losing the payment receipts — you will need the trail years later when an employee claims benefits.

How StartOne handles this

Our EPF/ETF registration service files Form D and your employee registrations, gets your employer number, and drops the monthly deadline onto your StartOne compliance calendar with reminders before every due date. Add payroll support and the monthly calculations, payslips and return preparation happen without you opening a spreadsheet.