Terminal Benefits Tax Calculator

Based on APIT Table 03 (2025/2026) | Powered by MAPA Associates

How to Identify Approved vs Non-Approved Terminal Benefits

When calculating tax on terminal benefits in Sri Lanka, it is important to determine whether your payment qualifies as an Approved Terminal Benefit or a Non-Approved Payment under APIT Table 03.

✅ Approved Terminal Benefits (Lower Tax)

• Gratuity paid under the Payment of Gratuity Act
• Compensation for loss of employment (genuine termination)
• Payments under approved Voluntary Retirement Schemes (VRS)
• Retirement benefits approved by the Inland Revenue Department
• ETF / EPF-related approved payments

Tax Benefit: First Rs. 10,000,000 tax-free, then only 6% and 12%

❌ Non-Approved Terminal Benefits (Higher Tax)

• Payments not approved by the Inland Revenue Department
• Excess gratuity or ex-gratia payments
• Early termination payments without proper classification
• Unstructured or informal compensation payments

Tax Impact: Taxed at normal progressive rates up to 36%

⚠️ Important Note

Whether a payment is approved depends on the nature of the payment, supporting documents, and IRD acceptance. Incorrect classification can significantly increase tax liability.