LWF Calculator - Labour Welfare Fund for All Indian States

What is Labour Welfare Fund (LWF)?

The Labour Welfare Fund (LWF) is a statutory contribution mandated by individual state governments under their respective Labour Welfare Fund Acts. The fund pools small periodic contributions from both employers and employees to finance welfare activities for the working class - ranging from housing loans and educational scholarships for dependents, to medical assistance, recreational facilities, and vocational training. Unlike the Employees’ Provident Fund (EPF), which accumulates as a personal retirement corpus in each employee’s account, LWF contributions go into a shared state welfare pool from which employees may apply for scheme benefits.

Who is Eligible for LWF?

LWF applicability depends on the specific state’s Labour Welfare Fund Act. Generally, LWF applies to employees working in factories, shops, and commercial establishments employing a minimum number of workers (typically 5 or more, depending on the state). Some states exclude certain categories such as managerial, supervisory, or technical staff above a salary threshold. Employees who are members of the PF scheme are often still liable for LWF as a separate obligation. Contract workers and casual workers may also be covered under some state acts.

Which States Have LWF?

As of 2026, the following Indian states have enacted and operationalized LWF: Andhra Pradesh, Chhattisgarh, Delhi, Goa, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Tamil Nadu, Telangana, and West Bengal. States including Uttar Pradesh, Rajasthan, Bihar, Jharkhand, Assam, Himachal Pradesh, Uttarakhand, and Jammu & Kashmir do not have an active LWF. Always check the latest notification from your state’s Labour Department, as legislation can be enacted or amended.

How to Calculate LWF in Salary

To calculate the LWF deduction in an employee’s salary: (1) identify the state where the employee works - LWF follows the work location, not the company’s registered office. (2) Look up that state’s employee contribution in the rate table above - it is a fixed amount, not a percentage of salary. (3) In slab-based states like Maharashtra, check the employee’s gross monthly salary against the slab threshold (₹3,000) to pick the correct rate. (4) Deduct the employee share in the applicable payroll cycle (monthly, half-yearly, or annual depending on the state) and add the employer share on top when remitting to the Labour Welfare Board.

Worked example: An employee in Maharashtra earning ₹25,000/month gross falls in the “above ₹3,000” slab. Their June and December payslips each show a ₹50 LWF deduction; the employer remits ₹200 per half-year (₹50 employee + ₹150 employer). Over the full year, the employee pays ₹100 and the employer pays ₹300.

Penalty for Non-Compliance

Employers who fail to collect and remit LWF contributions by the prescribed due date may face penalties including: interest on the overdue amount (typically 1 - 2% per month), fines ranging from ₹1,000 to ₹5,000 per default, and criminal prosecution for repeated violations in certain states. The employing establishment’s authorised signatory (typically the HR or finance head) may be held personally liable in serious cases. Timely compliance is therefore important for both financial and reputational reasons.

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