A pay slip is not just a salary receipt — it’s a legal and financial record that reflects the relationship between the employer and the employee.
In Sri Lanka, providing employees with a properly structured and transparent it is a mandatory legal requirement under the Shop and Office Employees (Regulation of Employment and Remuneration) Act, No. 19 of 1954 and the Wages Board Ordinance of 1941.
Whether in the apparel industry, logistics sector, or corporate office, a clear pay slip helps maintain trust, transparency, and compliance. This article breaks down the key sections that must appear in every Sri Lankan employee’s pay slip — and why each one matters.
1. Why a Pay Slip Matters
this document are essential for both employers and employees.
For employees, they:
- Prove official employment and income (for loans, visas, and EPF/ETF claims)
- Ensure all statutory deductions are correctly calculated
- Help track allowances, bonuses, and overtime payments
For employers, pay slip:
- Demonstrate compliance with Sri Lankan labour laws
- Build transparency and accountability
- Reduce the risk of wage-related disputes
In short, a it is a mirror of payroll integrity — and in Sri Lanka’s tightening HR compliance environment, it’s no longer optional.
➡️ External Source: Department of Labour Sri Lanka
2. Legal Requirement for Issuing Pay Slip
Under Section 23 of the Shop and Office Employees Act, every employer is required to issue a written pay slip to each employee at the time of payment.
It must include:
- The amount of remuneration earned
- Overtime, bonuses, and other additional payments
- Statutory deductions (EPF, ETF, PAYE)
- Net salary paid
Failure to provide a pay slip can lead to penalties and even legal complaints under the Labour Tribunal system.
3. Mandatory Components of a Pay Slip in Sri Lanka
A professional, compliant pay slip in Sri Lanka should include the following sections:
1. Company and Employee Information
- Employer’s name and address
- Employee’s full name
- Employee ID or registration number
- Designation / Department
- Pay period (month and year)
- Date of issue
This ensures identification and traceability for both parties.
2. Earnings Section
Lists all forms of income before deductions:
- Basic salary
- Cost of Living Allowance (COLA)
- Attendance / Productivity allowance
- Overtime pay
- Bonus or performance incentive
- Special allowances (meal, transport, or shift)
Each earning type must be itemized clearly.
3. Deductions Section
All statutory and voluntary deductions must be displayed separately, such as:
- EPF (8%) – Employee Contribution
- ETF (3%) – Employer Contribution (not deducted from employee)
- PAYE Tax (if applicable)
- Loan or advance deductions
- Attendance penalties or meal charges
This section ensures transparency in what’s deducted and why.
➡️ External Source: Inland Revenue Department – PAYE Tax Regulations
4. Employer Contributions (Informational Section)
Although not deducted from employees, it’s best practice to show employer contributions for clarity:
- EPF (12%)
- ETF (3%)
- Gratuity or other fund allocations
This shows employees their total employment value beyond take-home pay.
5. Summary Section
- Gross Pay: Total of all earnings
- Total Deductions: Sum of all deductions
- Net Pay (Take-Home Salary): Gross pay minus deductions
The Net Pay figure should be the exact amount credited to the employee’s bank account or paid in cash.
6. Bank & Payment Details
To maintain transparency and digital compliance, the following must be noted:
- Bank name and account number (if salary is banked)
- Payment method (cash, bank transfer, or cheque)
- Payment date
7. Employer Signature or Digital Authorization
Every pay slip should carry either:
- Authorized signature of the payroll officer or
- Official digital stamp from the company’s payroll system
This authenticates the pay slip as a valid legal document.
4. The Role of the Payroll Officer
Payroll officers are responsible for ensuring all this information is correctly presented.
Inaccurate pay slip can lead to disputes, legal issues, or penalties.
An effective Payroll Officer ensures:
- Accuracy in calculations
- Legal compliance under labour laws
- Confidential handling of salary data
- Employee satisfaction and trust
5. Digital Transformation of Pay Slip in Sri Lanka
With increasing digital adoption, many organizations are moving to electronic pay slip (e-slips).
Benefits include:
- Reduced paper usage
- Easier recordkeeping and audits
- Employee self-service access via HR portals
- Enhanced data security
“A transparent pay slip is the foundation of workplace trust — it protects both the employer and the employee.”
A well-designed pay slip is a small document with big impact.
It reflects the professionalism, transparency, and compliance of a Sri Lankan employer.
When companies prioritize accurate and informative pay slip, they build a culture of trust, respect, and fairness.
For employees, it provides security; for employers, it ensures legal protection and positive HR reputation.
Ultimately, a pay slip is not just about money — it’s about mutual accountability in the modern workplace.
6. Case Study: Apparel Sector Compliance Example
A large garment factory in Katunayake faced employee unrest due to confusion over overtime and EPF deductions.
After auditing their payroll, HR introduced a new pay slip format with clear breakdowns of hours, deductions, and employer contributions.
Within 3 months:
- Grievances dropped by 60%
- Worker satisfaction improved
- The company received ISO 45001 recognition for labour compliance transparency
This example shows that clarity in payroll = stability in operations.
7. Common Mistakes to Avoid
- ❌ Not issuing pay slip to casual or contract staff
- ❌ Combining multiple deductions without clear labeling
- ❌ Not updating new tax or EPF/ETF changes
- ❌ Missing signature or company details
Every pay slip is an official financial record — accuracy is non-negotiable.
Mr. Wajira Fernando
Group Manager - Human Resources
Puwakaramba Group of Company