
Managing payroll in Sri Lanka can feel overwhelming for many small and medium businesses. Between statutory deductions, evolving labour laws, and manual calculations, it’s easy to make mistakes that cost both time and money.
This guide walks you through how to set up payroll the right way and how Rooster HR simplifies every step of the process.
1️⃣ Understand Sri Lankan Payroll Basics
Before you set up your payroll, it’s important to understand the key components that make up a compliant payroll cycle in Sri Lanka:
- EPF (Employees’ Provident Fund): 8% employee + 12% employer contribution.
- ETF (Employees’ Trust Fund): 3% employer contribution.
- PAYE (Pay-As-You-Earn Tax): Applied based on the Inland Revenue Department’s tax brackets.
- Allowances and deductions: Such as attendance incentives, overtime, no-pay deductions, and custom company benefits.
2️⃣ Automate Attendance and Time Tracking
Accurate payroll starts with accurate attendance.
With Rooster’s fingerprint device integration, your employees can clock in and out seamlessly. The data syncs automatically into the system, so your HR team doesn’t need to manage messy Excel sheets or manual timecards.
Key advantages:
- Real-time syncing from biometric devices
- Shift and roster management
- Overtime and late attendance tracking
- Leave and attendance auto reconciliation
This ensures that every payslip reflects actual working hours — no more disputes or manual errors.
3️⃣ Define Leave Policies That Stay Compliant
Sri Lankan labour law mandates minimum annual, casual, and maternity leave allocations. However, many companies have additional leave types like paternity leave, study leave, or special leaves.
Rooster’s Leave Management module lets you:
- Create and customise leave types
- Set approval hierarchies
- Automate leave accruals
- Sync leave data directly with payroll
Your HR team can manage everything in one place, ensuring both compliance and transparency.
4️⃣ Build a Smart Payroll Formula System
Different industries have unique pay structures, daily wages, sales commissions, project allowances, or attendance-linked bonuses.
Rooster’s Custom Formula Builder enables you to automate any calculation logic.
Once configured, these formulas run automatically during each payroll cycle, minimising manual intervention and ensuring accuracy every time.
5️⃣ Generate Payslips and Reports in One Click
After verifying attendance and deductions, you can process payroll and generate payslips in seconds.
Rooster automatically handles:
- EPF/ETF submissions
- PAYE reports
- Bank transfer sheets
- Detailed audit trails
Employees can download their payslips from the self-service portal, no more endless HR requests.
6️⃣ Stay Future-Ready with Integrated HR & Payroll
Payroll is only one part of a bigger HR ecosystem. With Rooster, your payroll seamlessly integrates with:
- Time & Attendance
- Leave Management
- Employee Records (HRIS)
- Performance Management
This ensures a single source of truth for all employee data giving your HR team the insights they need to make smarter workforce decisions.
Final Thoughts
Setting up payroll in Sri Lanka doesn’t have to be complicated.
With Rooster HR, you can run compliant, accurate, and fully automated payroll in minutes whether you’re managing a team of 10 or 1,000.
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