SSCL in Sri Lanka: rate, liable turnover, the Rs 36 million threshold and due dates

What is SSCL?

The Social Security Contribution Levy (SSCL) is a levy of 2.5% on your liable turnover. It is charged on sales, not profit, so a business pays it even in a month when it makes a loss.

It is separate from VAT. It has its own registration, its own monthly payments and its own quarterly return.

How is liable turnover worked out?

Liable turnover is a fixed share of your turnover. The share depends on what kind of business the turnover comes from:

So the formula is:

SSCL = turnover × liable share × 2.5%

If your business does more than one kind of activity, for example selling goods and also charging for repairs, each part may fall under a different share. Ask your accountant to confirm the split for your business.

Some sales are exempt. For example, from 1 May 2026 the wholesale and retail sale of motor vehicles is exempt, while importing motor vehicles became subject to SSCL at the point of import.

When do you have to register for SSCL?

From 1 July 2026, you must register if your aggregate turnover exceeds, or is likely to exceed, Rs 9 million in a quarter or Rs 36 million over four consecutive quarters. You must apply within 15 days of the date your turnover passes, or is likely to pass, the threshold, and pay SSCL on liable turnover from that quarter onwards.

The test uses your full aggregate turnover, not your liable turnover. A wholesaler with Rs 10 million of sales in a quarter is over the Rs 9 million line, even though only Rs 5 million of it is liable.

The threshold described here applies to businesses other than importers. If you import goods, check with the IRD how SSCL applies to your imports.

A business crossing the new threshold. A retailer's quarterly sales:

Nothing changed in the shop. The law changed. A retailer that was comfortably below the old threshold needed to register from the July–September 2026 quarter.

Worked example: a wholesaler

A general wholesaler (not a registered distributor) sells groceries to shops. It is registered for SSCL. Its sales for the July to September 2026 quarter:

The wholesaler pays Rs 157,500 for the quarter, which is 1.25% of its Rs 12.6 million turnover. On a thin wholesale margin that is a real cost. If the business earns a 6% gross margin, SSCL takes about a fifth of the gross profit on these sales: Rs 157,500 out of Rs 756,000.

Worked example: a service business

An equipment repair and maintenance business charges only for services. Its turnover is steady at Rs 3,500,000 a month.

Its quarterly turnover is Rs 10.5 million. Under the old threshold it was outside SSCL; from 1 July 2026 it is inside. Compared with the wholesaler, it pays more SSCL on less turnover, because all of its turnover is liable.

When are SSCL payments and returns due?

SSCL is paid monthly, by the 20th of the following month. The quarterly return is due by the 20th of the month after the quarter ends.

Returns can be filed online through e-services, or at the relevant IRD office.

Note the difference from VAT: the quarterly VAT return is due by the last day of the month after the quarter, but the SSCL return is due by the 20th. Both payments fall on the 20th.

What mistakes do businesses make with SSCL?

The levy is simple to work out, so most errors come from the threshold and the dates rather than the sum.

How do you get ready if you are near the threshold?

Work through these steps once, and repeat them every month while you are close to the line.

1. Total your turnover by month and by quarter. Use your sales records, not bank deposits, because customers on credit pay later.
2. Look ahead. Big orders already agreed for the rest of the quarter count towards "likely to exceed".
3. Work out your liable share. Note which of your sales are wholesale or retail, which are services, and whether any are exempt.
4. Set money aside. For a general wholesaler, 1.25% of each month's sales covers the levy; for a service business, 2.5%.
5. Register within 15 days of passing, or expecting to pass, the threshold, and diary the 20th of every month.

Example. A retailer has sold Rs 6.8 million by the end of August, and has Rs 3.1 million of confirmed orders to deliver in September. The quarter is likely to reach Rs 9.9 million, over Rs 9 million. It should register now rather than wait for September's sales to land.

How does SSCL fit with VAT?

Since 1 July 2026 the two thresholds no longer match. VAT still uses Rs 15 million a quarter and Rs 60 million a year, because the proposed VAT cut was dropped. SSCL now uses Rs 9 million and Rs 36 million.

If your turnover is in the middle band, you may be registering for SSCL for the first time without ever having dealt with VAT. See VAT in Sri Lanka and the news piece on why the VAT threshold stays at Rs 60 million.