Professional Employer Organization (PEO) in Sri Lanka

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Employ contractors and employees in 160+ countries
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global talent

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Global PEO in Sri Lanka

Recruiting and hiring can be a pretty tiring process. When you’ve built an organization from the ground up, then of course you’re only going to want to hire the very best candidate for the job. 

And a lot of the time, these perfect employees are located overseas. But just because they’re not in the same country as you, doesn’t mean you have to pass up on recruiting them. 

It can seem like hiring an employee that’s living in Sri Lanka would be out of the question, especially if you’re a start-up or small business based elsewhere. 

But it’s not. In fact, professional employer organizations (PEO) in Sri Lanka, like Skuad, don’t just make it possible to hire internationally, they make it easy.

What is a PEO?

Essentially, a professional employer organization (PEO) helps organizations hire employees around the world, regardless of where the workers, or the company, is based. If you want to bring on a team member who’s living in Sri Lanka, a PEO will help you do it. 

A PEO takes care of HR responsibilities for businesses, including payroll management, organizing competitive benefits packages, navigating international tax law, and ensuring that all local regulations in Sri Lanka are met and complied with. 

A PEO service in Sri Lanka handles paystubs, benefits, deductions, and taxation while fulfilling local statutory employer requirements. PEOs take on the time-consuming and stressful parts of global hiring, leaving organizations free to focus on the important stuff –– that is, finding the best possible talent and growing the company. 

Partnering with a PEO lets small businesses find their feet and thrive in a global economy, allowing them to hire candidates from all around the world. Don’t let something as abstract as location stop you from bringing the best people on board!

Sounds like a PEO could be handy for your growing organization? Reach out to Skuad today and a friendly team member can answer all your burning questions. 

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What are the benefits of using a PEO provider in Sri Lanka?

Partnering with a PEO in Sri Lanka can open a lot of doors for your business. Here are just a few benefits of using a PEO to do business in Sri Lanka. 

Tap into a bigger talent pool

As soon as you limit yourself to hiring only in the country where your organization is based, you’re closing off a ton of opportunities for growth. If you want the best for your business, it’s time to expand your geographical boundaries, and start recruiting globally. 

Sri Lanka is a growing economy, which has seen impressive progress in the last decade. The government has invested in training skilled workers, so there’s a great opportunity for global businesses to recruit stellar talent. 

Become a globally competitive employer

As an organization, the dream is to have talented workers all around the world wanting to be employed by your business. To make a name for yourself as a competitive employer with excellent work culture, it’s important to ensure all employees are treated fairly.

A PEO will make sure that your employees in Sri Lanka — and elsewhere around the globe — are being rewarded with the statutory benefits they’re entitled to by local law. Your PEO also knows exactly what to offer potential employees in Sri Lanka, in order to attract the most qualified candidates. 

Save yourself money 

Hiring employees who are located overseas can get very expensive very quickly. You’d need to establish a local entity in Sri Lanka, contract in-house HR specialists to manage their employment, retain legal counsel to review terms and stay on top of local legalities, and obtain an in-country address to do business. 

Meanwhile, a PEO handles all this on your behalf, leaving you with a predictable cost of doing business in Sri Lanka –– and total peace of mind. 

Learn more about Skuad’s pricing structure by speaking to the team.

Get insights into new markets

Analyzing facts and figures is one thing, but if you’re looking to expand into a new market, nothing is more valuable than first-hand local knowledge. By bringing a Sri Lankan employee onto your team, you’ll be able to tap into their understanding of the market, giving you insights that’d be impossible to get anywhere else.

If you’re considering venturing into the Asian market, getting your foot in the door in Sri Lanka is a great first step!

Avoid the headache of incorporating your own entity in Sri Lanka

If you want to go about hiring in Sri Lanka on your own, get ready for a lengthy process. You’ll need to incorporate a legal entity, which can take months of work and will require a team of lawyers to navigate. It’s a costly endeavor (more on that below!) and is only really a good choice if you’re planning to hire an entire team of staff in Sri Lanka for years to come. 

But using a PEO streamlines the whole process. There’s no need to establish your own company in Sri Lanka. Your PEO will have its own legal entities already established, which can be used for your own business. 

They’ll act as an employer of record to hire employees on your behalf. On paper, the employees are hired by the PEO but you are the one to assign their job roles and daily duties at your own company. 

Be aware of cultural differences

We live in a diverse world full of different cultures. It’s a beautiful thing but can sometimes make for tricky situations in business. When hiring in Sri Lanka it’s important to be across all the cultural practices there. Your PEO will be across everything and will always be on hand to keep you informed. 

For example, did you know that Sri Lankan employees are entitled to a paid holiday every Full Moon Poya Day, which occurs about once a month? If they have to work, they receive 1.5x pay for the day. 

Comply with statutory regulations in Sri Lanka

We’ll say it once: Don’t open yourself up to fines and bans as a result of non-compliance. Navigating international law can be tricky, especially if you’re doing it from the other side of the world. 

Employing workers in Sri Lanka means you need to be familiar with labor, payroll, and taxation laws — and the ramifications of non-compliance can be devastating. Partnering with a PEO to hire in Sri Lanka is the easiest way to protect your company and your employees. 

Some of the specifics to know when hiring in Sri Lanka include:


  • Employees are paid in Sri Lankan Rupees.
  • Typically, employees are paid monthly. 
  • Total working hours should not exceed 9 hours per day or 45 hours per week.
  • If an employee works longer than 8 hours in a day, they must be given a rest break between the hours of 11 a.m. and 2:00 p.m. 
  • There is no legal requirement for organizations to pay their staff bonuses. 

Sri Lanka tax rates and contributions

Employers must contribute 12% of a worker’s salary to the Employee Provident Fund, while employees contribute 8% of their pay.

Employees are taxed as such:

  • Less than LKR 300,000 = 6%
  • LKR 300,000 -  LKR 6,000,000 = 12%
  • More than LKR 6,000,000 = 18%

Paid leave

  • Employees receive 14 days of paid leave per year, once they’ve been employed for 12 months of continuous service. 
  • Sri Lankan employees receive a paid holiday day every month, which coincides with the full moon. 
  • The total number of public holidays in Sri Lanka hovers around a whopping 30 days a year, though this is subject to change based on the calendar. 
  • Employees get seven days of sick leave after a year’s service.
  • Maternity leave is 84 days’ paid maternity leave, which is typically split between 14 days prior to birth and 70 days after childbirth. 
  • There is no legal stipulation for paternity leave or carer’s leave.

Learn more about how Skuad’s PEO services can help your business to grow in Sri Lanka by booking a free demo today.

What does it cost to build a team in Sri Lanka?

Company Incorporation in Sri Lanka

One route to follow when hiring in Sri Lanka is to incorporate your own legal entity in-country. On paper, it seems like a relatively affordable option –– costs to register and open a business hover around $500 USD. 

But don’t forget the other fees that will start popping up: registering a physical address, hiring local lawyers and HR professionals to draw up contracts, flights to and from Sri Lanka to handle any issues, banking fees, and compulsory tax… and that’s just the beginning.

Alternatively, you can partner with a PEO in Sri Lanka instead. 

PEO in Sri Lanka

With Skuad, you can get started for free and cancel at any time. 

We offer PEO services in Sri Lanka starting at just $19 per employee per month, which will allow you allow you to onboard and pay international employees. Meanwhile, our employer of record services in Sri Lanka, which are more in-depth, see us hiring international employees on your behalf. We then manage payroll, benefits, and compliance –– for this service, prices start from $199 per month.

Want to book in for a demo?

If Skuad sounds like a good solution for your business, we’d love to have a chat! Book in today for a free demo and we’ll walk you through how it’ll all work.

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