Sri Lanka, Nov. 9 -- Formal-sector gross wages in Sri Lanka increased by 131.8% between January 2017 and March 2026, outpacing the 114.9% rise in consumer prices.

However, after accounting for inflation, the 8% Employees' Provident Fund (EPF) contribution and PAYE/APIT income tax, most employees are still worse off, according to an analysis based on the EPF wage index.

The findings show that only employees who started with a monthly salary of around Rs. 100,000 in January 2017 recorded a real increase in take-home pay, gaining 7.1%. At the other end of the scale, those who began at Rs. 1 million a month experienced a 17% decline in purchasing power.

The analysis attributes this widening gap primarily to the income tax structure. While ...