Also check EPF contribution, ESI, and salary TDS (Sec 192).
The Labour Welfare Fund (LWF) is a small, state-specific welfare cess collected from both employer and employee, funding welfare activities for industrial and commercial workers — housing, education, medical facilities and recreation. Unlike PF or ESI, LWF has no central statute; each state that chooses to levy it does so under its own LWF Act, which is why the amount, the periodicity (monthly, half-yearly or annual — all three patterns exist across different states), and even whether it applies at all vary so much state to state. That also means LWF sits outside the four central Labour Codes that took effect 21 November 2025 — those codes reorganised central Acts such as EPF and ESI (now under the Code on Social Security, 2020) and the Payment of Bonus Act (now under the Code on Wages, 2019), but each state's LWF Act stands exactly as it did before.
Only roughly 16-17 states/UTs currently levy LWF. Several apply a minimum establishment headcount before the fund applies at all (Karnataka requires 50+ employees, for example, while Delhi and Maharashtra require just 5+), and some exempt managerial or supervisory staff above a wage threshold. Because the amounts are so small — commonly single or low double-digit rupees per employee per cycle — LWF rarely shows up as a payroll line item of any size, but missing it is still a compliance gap that shows up in an audit or a labour inspection.
The secondary payroll-compliance publishers that cover LWF (ClearTax, Razorpay, and similar) frequently disagree with each other on the exact amount or due date for a given state — LWF gets far less scrutiny than PF, ESI or income tax, so errors propagate between blog posts more easily. This tool cross-checked at least two sources per state and explicitly flags where they disagreed, rather than silently picking one.
An establishment in Maharashtra has 25 employees, comfortably above the 5-employee LWF threshold. A given employee earns ₹15,000/month — above Maharashtra’s ₹3,000 wage-tier cutoff.
