India Statutory
Labour Welfare Fund (LWF)
A state-governed statutory fund that improves working conditions and living standards for employees — understand which states apply, contribution rates, deduction cycles, and how WorkWisely automates it all.
India
Statutory
Payroll
👥 Who uses this
- Payroll admins managing LWF deductions across multiple states
- HR teams determining which employees are covered under each state's LWF Act
- Finance teams tracking LWF payment cycles and submission deadlines
✨ What you'll achieve
- Identify which states mandate LWF and which employees are covered
- Apply the correct state-specific contribution rates and deduction cycles
- Register your establishment and make timely payments to avoid penalties
- Configure WorkWisely to automate LWF deductions by work location
What is the Labour Welfare Fund?
The Labour Welfare Fund (LWF) is a statutory contribution managed by state governments in India, introduced under the provisions of the Industrial Disputes Act, 1947. Its goal is to improve the working conditions, living standards, and social security of employees by providing access to medical care, housing assistance, education for dependants, nutritious food, and recreational facilities.
As of today, 16 states and Union Territories have enacted the Labour Welfare Fund Act. Contribution rates, applicable employees, deduction frequency, and submission deadlines all vary by state — making it essential to configure LWF at a per-work-location level in your payroll system.
💡 Key point
- States not currently levying LWF include Uttar Pradesh, Bihar, Jharkhand, Himachal Pradesh, Assam, Rajasthan, and others — employees in these states have no LWF deduction.
- Employers are responsible for registering, collecting employee contributions, adding their own share, and remitting the combined amount to the state authority.
State-wise LWF Contribution Rates & Deadlines
The table below covers the key LWF states. Contribution amounts shown are per employee per applicable period.
| State |
Employee |
Employer |
Frequency |
Submission Deadline |
| Andhra Pradesh | ₹30 | ₹70 | Annual | 31st January |
| Chandigarh | ₹5 | ₹20 | Monthly | 15th Oct & 15th Apr |
| Chhattisgarh | ₹15 | ₹45 | Half-yearly | 15th Jul & 15th Jan |
| Delhi | ₹0.75 | ₹2.25 | Half-yearly | 15th Jul & 15th Jan |
| Goa | ₹60 | ₹180 | Half-yearly | 15th Jul & 15th Jan |
| Gujarat | ₹6 | ₹12 | Half-yearly | 15th Jul & 15th Jan |
| Haryana | ₹31 | ₹62 | Monthly | 15th Apr & 15th Oct |
| Karnataka | ₹20 | ₹40 | Annual | 15th January |
| Kerala | ₹20 | ₹20 | Monthly | 5th of every month |
| Madhya Pradesh | ₹10 | ₹30 | Half-yearly | 15th Jul & 15th Jan |
| Maharashtra (≤ ₹3,000) | ₹6 | ₹18 | Half-yearly | 15th Jul & 15th Jan |
| Maharashtra (> ₹3,000) | ₹12 | ₹36 | Half-yearly | 15th Jul & 15th Jan |
| Odisha | ₹10 | ₹20 | Half-yearly | 15th Jul & 15th Jan |
| Punjab | ₹5 | ₹20 | Monthly | 15th Apr & 15th Oct |
| Tamil Nadu | ₹20 | ₹40 | Annual | 31st January |
| Telangana | ₹2 | ₹5 | Annual | 31st January |
| West Bengal | ₹3 | ₹15 | Half-yearly | 15th Jul & 15th Jan |
Employer Obligations Under LWF
In states where the LWF Act applies, every covered employer must:
- Register the establishment under the state's LWF Act within 15 days of commencement.
- Deduct the employee's LWF contribution from salary on the applicable date.
- Add the employer's share to the collected amount.
- Remit the combined contribution to the state Labour Welfare Board before the submission deadline.
- File returns using the prescribed form for the state (e.g., Form D for Karnataka, Form A for Tamil Nadu).
LWF Employee Applicability — Quick Guide
Most states exclude employees in managerial or supervisory roles earning above a specified wage threshold. For example:
| State |
Exclusion Threshold |
| Andhra Pradesh | Managerial/part-time employees excluded |
| Chandigarh | Only employees earning ≤ ₹15,000/month |
| Tamil Nadu | Supervisory employees earning above ₹15,000/month excluded |
| Karnataka & West Bengal | All employees working for salary — skilled or unskilled, manual or clerical |
Penalties for Non-Compliance
Each state defines its own penalty structure. The general framework across states is:
- Late payment interest: 1% per month for the first 3 months of delay; 2–3% per month thereafter.
- First-time obstruction offence: Imprisonment up to 3 months, fine of ₹500, or both.
- Repeat offences: Imprisonment up to 6 months, fine of ₹1,000, or both.
⚠️ Important
- A notice is issued before penalties are imposed — but after you've missed a deadline. Act before the deadline to avoid this entirely.
- Contribution rates are subject to revision by state governments. Always verify the latest rates with the state Labour Welfare Board or through WorkWisely's compliance calendar.
How WorkWisely Handles LWF
- Enable LWF: Go to Tax and Statutory Compliance → Statutory Components and toggle on Labour Welfare Fund. Select all states where you have employees.
- Assign work location state: In My Team -> Team Summary -> Employee Profile → Job Info → Work Location State, set the correct state for each employee. WorkWisely uses this to apply the right LWF slab and frequency.
- Employee-level control: Enable or disable LWF for individual employees under Employee Profile → Statutory → LWF, for cases where the employee is in a managerial role excluded by that state's Act.
- Automatic deductions: On each pay run, WorkWisely deducts the employee's LWF contribution at the correct frequency (monthly, half-yearly, or annual) based on the work state.
- Challan & reports: After payroll finalisation, download the LWF contribution summary from Payroll → Compliance → LWF Report for remittance to the state Labour Welfare Board.
- Deadline reminders: WorkWisely sends reminders before each state-specific LWF submission deadline via the Payroll → Compliance Calendar.