Abstract:
Purpose: This study explores the impact of the Pay as You Earn (PAYE) tax on the
performance of executive staff at Sri Lankan state universities. The research aims to
identify how the current PAYE tax system affects motivation, job satisfaction, and
productivity among these executive staff.
Design/methodology/approach: A sample size of 320 executive staffs from 17 state
Universities was studied using the stratified sampling method. To ensure validity and
reliability, the survey was pre-tested, and Cronbach’s alpha was used to confirm
internal consistency. Factor analysis identified the key dimensions of job satisfaction
and motivation affected by the PAYE tax, while correlation analysis revealed
significant negative relationships between tax burden and performance. Multiple
regression analysis further highlighted that higher PAYE tax burdens significantly
reduce job satisfaction and motivation.
Findings: The findings underscore the substantial financial strain caused by the
PAYE tax system, which directly impacts work performance and commitment among
university executive staff.
Practical implications: The study offers policy recommendations aimed at balancing
taxation and employee welfare, ensuring that tax policies do not unintentionally
compromise the operational efficiency of university leadership.
Originality value: By illuminating the relationship between taxation and human
resource performance, this study contributes to a broader understanding of taxation
policies and their effects on human resource performance in the public higher
education sector of Sri Lanka, with broader implications for tax reform and employee
welfare programs.
