Sri Lanka Foreign Income Tax Calculator
For Sri Lankans earning from overseas clients, remote employment, consulting, digital businesses and foreign investments. Estimates the Sri Lankan tax on that income for the year of assessment 2026/2027, and shows every assumption it makes on the way.
Generated 14 September 2026
Foreign income tax estimate
This is an estimate, not a tax assessment or a statement of what you owe. An indicative estimate only. Your actual position may differ — please confirm before relying on it.
Your details
Your results
Estimated Sri Lankan tax
LKR 0.00
Enter your foreign income to see your estimate.
An indicative estimate only. Your actual position may differ — please confirm before relying on it.
How we treated this income
Converting your income
- Foreign income (USD)0.00 USD × 12 per year
- $0.00 USD
- Exchange rate usedThe rate you entered — Calculate.lk publishes no rates
- 1 USD = 0.00 LKR
- Foreign income converted to LKR
- LKR 0.00
- Net foreign income
- LKR 0.00
Taxable income
- Total income assessed
- LKR 0.00
- Less personal relief
- − LKR 0.00
- Estimated taxable income
- LKR 0.00
Estimated tax
- Estimated Sri Lankan tax before credits
- LKR 0.00
- Estimated Sri Lankan tax
- LKR 0.00
How foreign income taxation works in Sri Lanka
The rules changed on 1 April 2025. These are the parts that decide what you owe — open whichever applies to you.
What changed on 1 April 2025
Until 31 March 2025, income earned by Sri Lankan residents from services rendered to clients abroad was exempt from income tax if it was remitted to Sri Lanka. That exemption was removed. Since 1 April 2025, the same income is taxable — but at a maximum rate of 15% rather than the full progressive rates, provided it meets specific conditions.
The two conditions that decide the rate
The Inland Revenue Department describes 15% as the maximum income tax rate applicable to two categories:
- Service exports — gains and profits from any service rendered in or outside Sri Lanka to any person, to be used outside Sri Lanka, where payment is received in foreign currency and remitted through a bank to Sri Lanka.
- Foreign source income — gains and profits from any foreign source, earned in foreign currency and remitted through a bank to Sri Lanka.
Both turn on the same practical point: the money must arrive in Sri Lanka in foreign currency, through a bank. If you are paid into a foreign account and never remit the funds, or receive payment outside the banking system, the concessionary treatment does not apply on its terms, and the normal progressive rates would apply instead. That is why the calculator asks rather than assuming.
Why it is a maximum, not a flat 15%
15% is described as a maximum rate, and it works as a cap on each tax band rather than a single flat percentage of everything you earn. After personal relief of LKR 1,800,000, the first Rs 1M of taxable qualifying income is taxed at 6%, the same as the first band for any other income. Only the amount above that is taxed at 15% — the higher bands that would normally apply (18%, 24%, 30%, 36%) are all brought down to 15% for this income specifically.
So a small amount of qualifying foreign income can be taxed at well under 15% once relief and the 6% band are accounted for, and a large amount approaches 15% as its effective rate without ever reaching it, since the first Rs 1M always stays at the lower 6% rate.
Profits, not turnover
For freelancers and digital businesses, tax applies to gains and profits, meaning your receipts after deductible business expenses and capital allowances. If you invoice USD 2,000 a month but spend meaningfully on equipment, software, platform fees and internet, the assessable figure is what remains after those costs. Keep the records that support them.
If you are not resident in Sri Lanka
A person who is not resident in Sri Lanka for a year of assessment is taxed on Sri Lankan-source income. Foreign income earned while non-resident falls outside that scope, which is why the calculator excludes it when you select a non-resident status. Residency is a legal test, not a matter of preference — if your position is unclear, establish it before relying on any calculation.
How we calculated this
These are the steps applied to your own figures.
1. Converting your income to rupees
Your income of $0.00 USD received every month becomes $0.00 USD over a year.
At the rate you entered of 1 USD = 0.00 LKR, that is LKR 0.00.
Calculate.lk does not publish exchange rates. For tax purposes what matters is the rate at the time of the transaction, which is the rate your bank applied when the money arrived — not the rate today.
2. Deciding how the income is taxed
No foreign income has been entered, so only your Sri Lankan income is taxed.
3. Arriving at taxable income
- Net foreign income: LKR 0.00
- Sri Lankan income: LKR 0.00
- Other income: LKR 0.00
- Total assessed: LKR 0.00
- Less personal relief: − LKR 0.00
- Estimated taxable income: LKR 0.00
Personal relief is applied against income taxed at the normal rates first, and only then against income qualifying for the 15% maximum. This ordering is an assumption of Calculate.lk, stated below.
4. Working out the tax
- Estimated Sri Lankan tax: LKR 0.00
Confirm your position before you act on this
Calculation assumptions
Last updated: 2 September 2026
Where the rules leave room for interpretation, this is the position we took. Open any one to see the reasoning.
The 15% cap depends on how the money reaches Sri LankaYou can change this
The concessionary maximum rate applies where payment is received in foreign currency and remitted through a bank to Sri Lanka. If you tell us the income was not remitted through a bank, we apply the normal progressive rates instead. We cannot verify your banking arrangements, so this is your input.
The 15% figure caps each band, not the whole amount
The Inland Revenue Department describes 15% as the maximum income tax rate applicable to qualifying service-export and foreign-source gains and profits. We apply this band by band: after personal relief, the first Rs 1,000,000 of taxable qualifying income is taxed at the normal first-band rate of 6%, and only the amount above that is capped at 15% in place of the higher bands (18%, 24%, 30%, 36%) that would otherwise apply. Qualifying income is assessed on its own scale starting at zero — it is not added on top of your other income and taxed at whatever band that combined total reaches.
Non-residents are taxed on Sri Lankan-source income onlyYou can change this
If you tell us you are not resident in Sri Lanka for the year of assessment, we exclude foreign-source income from the Sri Lankan calculation. Residency is a legal test based on days of presence and other factors — we take your answer at face value and do not determine it for you.
Foreign tax relief is capped at the Sri Lankan tax on the same income
Where you enter foreign tax already paid, we offset it against the estimated Sri Lankan tax on that same foreign income, and never below zero. Actual relief depends on the double tax treaty (if any) with the source country and on the evidence you can produce. We do not apply treaty-specific rules.
Exchange rates are indicative, and you can override every oneYou can change this
In the quick estimate you supply the rate yourself. In the advanced setup we fill each month with an indicative mid-market rate, averaged from sampled days in that month, purely so you do not have to look up twelve figures by hand. A bank applies its own rate and spread, so the amount that actually reached your account will differ — where you have the real figure from a statement, type it over ours. Months that have not happened yet carry the latest known rate forward and are labelled as assumed.
Business income is taken net of the expenses you enterYou can change this
For business or freelance income, tax applies to gains and profits — that is, income after deductible business expenses and capital allowances. We use the expense figure you enter and do not estimate one for you.
Personal relief is applied once, against total assessable income
Personal relief of the amount shown for the selected year of assessment is deducted once from your combined income, not separately per income source. It is available to individuals resident in Sri Lanka and to non-resident citizens of Sri Lanka.
Where these rates come from
- Notice to the Taxpayers PN/IT/2025-01 — Inland Revenue (Amendment) Act, No. 02 of 2025
Inland Revenue Department of Sri Lanka · Published 26 March 2025 · Checked 2 September 2026
- Tax Chart — Year of Assessment 2025/2026
Inland Revenue Department of Sri Lanka · Published 1 April 2025 · Checked 2 September 2026
- Advance Personal Income Tax (APIT) Tables and Guideline 2025/2026
Inland Revenue Department of Sri Lanka · Published 1 April 2025 · Checked 2 September 2026
Important — please read
Figures shown here are indicative estimates produced from the information you enter, and should be treated as a guide rather than a determination of what you owe or will receive. Rates, thresholds and rules change, individual circumstances vary widely, and no calculator can account for every factor that may apply to you. Calculate.lk is an independent service, is not affiliated with or endorsed by any government department or authority, and gives no warranty that any figure shown is accurate, complete or current. Before acting on anything here — filing, borrowing, negotiating a salary or planning around a number — confirm your position with a suitably qualified professional or the relevant authority.
Produced by Calculate.lk (https://calculate.lk). Calculate.lk is an independent service and is not affiliated with, endorsed by, or operated by any government department or authority. This document has no official status and should not be submitted as, or relied upon in place of, a return or assessment prepared by a qualified professional.
Frequently asked questions
Is foreign income taxable in Sri Lanka?
Since 1 April 2025, yes. The exemption that previously applied to service exports and foreign source income was removed by the Inland Revenue (Amendment) Act, No. 02 of 2025. Income earned by a Sri Lankan resident from foreign services or foreign sources is now taxable, but where the payment is received in foreign currency and remitted through a bank to Sri Lanka, the maximum income tax rate is 15% rather than the full progressive rates.
How much tax do freelancers pay in Sri Lanka?
A resident freelancer earning from overseas clients, paid in foreign currency and remitting through a bank, faces a maximum rate of 15% on the profits of that work. Tax applies to gains and profits, so deductible business expenses and capital allowances reduce the amount assessed. Personal relief of Rs 1,800,000 a year is also available, so smaller incomes can be taxed at less than 15% or not at all.
What happens if I do not remit the money to Sri Lanka?
The 15% maximum rate is expressed as applying where payment is received in foreign currency and remitted through a bank to Sri Lanka. If that condition is not met, the concession does not apply on its terms and the normal progressive rates of up to 36% would apply instead. Because this depends on facts only you know, the calculator asks rather than assuming, and recalculates either way.
Can I claim tax paid in another country?
Where you have paid tax in the source country, you can enter it and the calculator offsets it against the estimated Sri Lankan tax on the same income, capped at that amount so the credit never creates a refund. Actual relief depends on the double tax treaty with that country, if any, and on the evidence you can produce. This calculator does not apply treaty-specific rules.
What exchange rate should I use?
Use the rate that actually applied when the money reached you, which is normally the rate your bank used on the date of remittance — not today’s rate. Calculate.lk deliberately publishes no exchange rates, because a stale rate would produce a confidently wrong answer. Enter the rate from your own bank statement.
Do remote workers employed by foreign companies pay Sri Lankan tax?
A person resident in Sri Lanka is generally taxed on their worldwide income, so income from remote work for a foreign employer falls within the Sri Lankan tax net. Whether it is treated as a service export attracting the 15% maximum rate depends on the nature of the arrangement and how you are paid. This is an area where the answer turns on your specific contract, so confirm it with a qualified tax adviser.
Is the 15% a flat rate or a maximum?
It is a maximum, and it applies band by band rather than as one flat percentage of everything you earn. After personal relief, the first Rs 1,000,000 of taxable qualifying income is taxed at 6% — the same first band as any other income. Only the amount above that is capped at 15%, replacing the higher bands (18%, 24%, 30%, 36%) that would otherwise apply. So a freelancer earning around Rs 3,600,000 a year, for example, pays roughly Rs 180,000 — 6% on the first Rs 1,000,000 of taxable income and 15% on the rest — not 15% of the whole amount.