Labour Welfare Fund in India: State-Wise Rates & Due Dates
The Labour Welfare Fund (LWF) is a small contribution, paid by the employee and the employer, to a state welfare board. The amounts are tiny, the compliance burden is not: every state has its own rate, frequency, due date and, often, its own registration form. LWF is also where state rules are changing fastest.
Read this first. The sources I compared agree on most states but disagree on a handful (Madhya Pradesh, Chhattisgarh, Kerala, Haryana, Delhi, Odisha). I show the consistent figures in the main table and list the conflicts below it. State boards revise amounts, so confirm against the board's notification before you load rates into payroll.
1. State-wise rates and due dates
| State / UT | Employee | Employer | Frequency | Due date |
|---|---|---|---|---|
| Karnataka | ₹50 | ₹100 | Annual | Deduct in December, remit by 15 January |
| Maharashtra | ₹25 | ₹75 | Half-yearly | 15 July and 15 January |
| Gujarat | ₹6 | ₹12 | Half-yearly | 15 July and 15 January |
| Tamil Nadu | ₹20 | ₹40 | Annual | 31 January |
| West Bengal | ₹3 | ₹30 | Half-yearly | 15 July and 15 January |
| Andhra Pradesh | ₹30 | ₹70 | Annual | 31 January |
| Telangana | ₹2 | ₹5 | Annual | 31 January |
| Goa | ₹60 | ₹180 | Half-yearly | 15 July and 15 January (one source: "prescribed date") |
| Delhi | ₹0.75 | ₹2.25 | Half-yearly | 15 July and 15 January |
| Punjab and Chandigarh | ₹5 per month | ₹20 per month | Monthly deduction, periodic remittance | 15 April and 15 October (one source: 15th of following month) |
Where sources conflict
- Madhya Pradesh: employee ₹10; employer ₹20 in one source and ₹30 in another. Half-yearly, 15 July / 15 January.
- Chhattisgarh: employee ₹15; employer ₹30 in one source and ₹45 in another. Half-yearly.
- Kerala: ₹50 / ₹50 annual in one source; another splits it into shops and establishments (₹50 / ₹50, monthly, around the 5th of the following month) and others (₹45 / ₹45, half-yearly).
- Haryana: ₹31 / ₹62 monthly in one source; another says the amount is wage-linked with a ceiling and the employer pays twice the employee share.
- Odisha: ₹20 / ₹40 half-yearly in one source; another gives no figure.
- Delhi: listed as half-yearly but amounts quoted per month; check the cycle.
Where an employer runs in several of these states, build the LWF master from each board's own notification, not from a blog.
2. Karnataka in detail
The Karnataka Labour Welfare Fund (Amendment) Act, 2025 (Karnataka Act No. 05 of 2026) received assent on 6 January 2026 and was published on 7 January 2026, taking effect immediately.
| Item | Before | From 7 January 2026 |
|---|---|---|
| Applicability threshold | More than 50 persons | 10 or more persons |
| Payment mode | Cheque or crossed demand draft | Net banking, NEFT, RTGS, UPI or demand draft |
| Annual contribution | n/a | Employee ₹50, employer ₹100 |
Key points
- The change applies from calendar year 2026, so contributions for 2025 are unaffected.
- Karnataka runs a calendar-year cycle. Deduct in the December 2026 payroll, remit both shares to the Karnataka Labour Welfare Board, and file the annual statement (Form D) by 15 January 2027.
- There is no transition period and no grace window for first-time filers.
- The state can issue clarifying orders for up to two years from commencement.
- Registration under the Shops and Establishments Act does not enrol you in the LWF automatically.
Accounting treatment. Credit a Labour Welfare Fund Payable liability when you deduct the employee share, and debit a Labour Welfare Fund Expense for the employer share.
3. Common mistakes
- Assuming that LWF applies only to factories.
- Using last year's rate after a revision.
- Mixing up half-yearly and annual cycles.
- Paying only the employee share.
- Missing the new Karnataka threshold because headcount sits between 10 and 50.
- Treating the unclaimed amount as the employer's own money. Unpaid contributions generally must be remitted to the board.
4. A 5-step LWF routine
- Build a state master (rate, frequency, due date, form, portal).
- Test headcount against each state's threshold every quarter.
- Deduct in the right month and track by state.
- Pay online and file the statement.
- Keep the challan and acknowledgement in a compliance folder, ready within five minutes if an inspector asks.
Frequently Asked Questions (FAQs)
The Labour Welfare Fund (LWF) is a fund established by state governments to support employee welfare initiatives, including education, healthcare, and other welfare benefits. Contributions are collected from employees and employers according to the applicable state laws.
Under the Karnataka Labour Welfare Fund (Amendment) Act, 2025, published on 7 January 2026, the applicability threshold was changed from more than 50 persons to 10 or more persons for the establishments covered by the amended definition. Employers should verify whether their establishment falls within the Act's scope.
In Karnataka, the annual LWF contribution is ₹50 per employee and ₹100 per employee from the employer, totalling ₹150 per employee. The employee contribution is generally deducted from December wages, and the employer must remit both shares to the Karnataka Labour Welfare Board by 15 January of the following year.
Employers can remit LWF contributions through online payment channels, including net banking, NEFT, RTGS and UPI, or by demand draft, as provided under the Karnataka Labour Welfare Fund (Amendment) Act, 2025. Employers should retain the payment acknowledgement and relevant compliance records
Conclusion
LWF is a calendar discipline. Put the due dates in the system, assign an owner, and the risk goes away.