If you run payroll for even a small team in India, you’ve probably seen “LWF” as a line item and wondered what it actually is, whether it applies to your business, and why the amount is different every time you check. You’re not alone — Labour Welfare Fund is one of the most misunderstood statutory deductions in Indian payroll, mostly because there’s no single national rule. Every state writes its own.
This guide breaks down what LWF is, which states levy it, the current contribution rates, and when you need to pay — so your compliance calendar doesn’t have any gaps.
*Rates as reported as of mid-2026. Several states have revised rates recently — Maharashtra moved from ₹12/₹36 to ₹25/₹75 in March 2024, and Karnataka lowered its applicability threshold from 50 employees to 10 employees effective January 2026, alongside a rate revision. Always cross-check the current notification on your state Labour Welfare Board’s website before filing, since these amounts do get revised.
What Is the Labour Welfare Fund?
The Labour Welfare Fund is a state-administered corpus set up to fund welfare measures for workers — things like medical care, housing assistance, education support for workers’ children, and recreational facilities. It’s financed through small, fixed contributions from both employers and employees, collected periodically and deposited with the respective State Labour Welfare Board. The key thing to understand is that LWF is a state subject, not a central one. Unlike PF (12% of basic + DA) or ESI (a percentage of wages), LWF is a flat rupee amount per employee, and that amount, the collection frequency, and even whether the fund exists at all varies from state to state. Only about 16 states and union territories currently levy LWF. States like Uttar Pradesh, Bihar, Rajasthan, Jharkhand, and most of the northeast do not have a mandatory LWF for private establishments.Who Needs to Pay LWF?
Broadly, LWF applies to employees of establishments — factories, shops, and commercial establishments — covered under the state’s LWF Act, once the state’s minimum headcount threshold is crossed. Thresholds vary widely: some states apply LWF from the very first employee (Goa, Madhya Pradesh), while others only kick in at 10, 20, or more employees. Common exclusions across most states include:- Managerial or supervisory staff above a state-specified wage ceiling
- Apprentices engaged under the Apprentices Act, 1961
- Part-time employees, in several states
- Establishments that haven’t yet crossed the minimum employee threshold
State-Wise LWF Contribution Rates
Contribution amounts are fixed rupee figures, not a percentage of salary (Haryana is the one notable exception, where the employee share is 0.2% of wages, capped monthly). Here’s where things currently stand across the major LWF-levying states:| State | Employee Contribution | Employer Contribution | Frequency |
|---|---|---|---|
| Andhra Pradesh | ₹30/year | ₹70/year | Annual |
| Chandigarh | ₹5/month | ₹20/month | Monthly |
| Chhattisgarh | ₹15/half-year | ₹45/half-year | Half-yearly |
| Delhi (NCT) | ₹0.75/half-year | ₹2.25/half-year | Half-yearly |
| Goa | ₹60/half-year | ₹180/half-year | Half-yearly |
| Gujarat | ₹6/half-year | ₹12/half-year | Half-yearly |
| Haryana | 0.2% of wages (capped ₹35/month) | 2x employee share (capped ₹70/month) | Monthly |
| Karnataka | ₹50/year | ₹100/year (+ ₹50/year from the state) | Annual |
| Kerala | ₹50/month (shops/commercial); ₹45/half-year (other establishments) | Matching employer share | Monthly or half-yearly, depending on establishment type |
| Madhya Pradesh | ₹10/half-year | ₹30/half-year | Half-yearly |
| Maharashtra | ₹25/half-year | ₹75/half-year | Half-yearly |
| Odisha | ₹20/half-year | ₹40/half-year | Half-yearly |
| Punjab | ₹5/month | ₹20/month | Monthly |
| Tamil Nadu | ₹20/year | ₹40/year | Annual |
| Telangana | ₹2/year | ₹5/year | Annual |
| West Bengal | ₹3/half-year | ₹15/half-year | Half-yearly |
Due Dates by Collection Cycle
LWF due dates follow the collection frequency, but the exact date still varies by state:- Monthly states (Haryana, Punjab, Chandigarh, Kerala for shops/commercial establishments): typically due by the last day of the following month.
- Half-yearly states (most others, including Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh, Odisha, West Bengal, Delhi): contributions are usually collected for the periods ending June and December, with payment due by 15 July and 15 January respectively (some states specify 30 June/31 December as the collection date instead — check your specific state notification).
- Annual states (Andhra Pradesh, Karnataka, Tamil Nadu, Telangana): typically due by 31 January each year.
Registration and Filing Process
- Map your applicability state by state. Identify every state where you have employees and check whether that state’s LWF Act applies to your establishment type and headcount.
- Register with each State Labour Welfare Board. This is typically done online — for example, Maharashtra’s registration runs through the mahakamgar.maharashtra.gov.in portal. You’ll need establishment details (name, address, type), employee count, and bank account information. One registration doesn’t cover multiple states — you register separately wherever you operate.
- Deduct the employee share from salary during the relevant contribution period.
- Add the employer share and remit the combined amount to the Labour Welfare Board by the due date, along with the prescribed return (Form A, Form D, or a state-specific form, depending on the state).
- Maintain records. Keep challans, return filings, and employee-wise deduction records on hand — inspectors can and do ask for these during routine or triggered inspections.
