Payroll & statutory · Updated September 2026
The Labour Welfare Fund, or LWF, is a small statutory contribution collected in some states to fund welfare activities for workers: housing, medical camps, education aid, recreation and similar schemes. Like professional tax, it is a state subject, so whether it applies, how much it is, and how often it is deducted all depend on the state where the employee works.
Maharashtra, Karnataka, Tamil Nadu, West Bengal, Andhra Pradesh, Telangana, Gujarat, Kerala, Madhya Pradesh, Delhi, Haryana, Punjab and Goa are among the states and union territories that operate an LWF. Many other states have no such fund. Coverage within a state is usually defined by the Shops and Establishments Act or the Factories Act, sometimes with a minimum headcount.
The amounts are token. Employee contributions typically range from a few rupees to a few tens of rupees per period, with the employer paying two or three times the employee share. Deduction frequency varies: some states collect twice a year (commonly June and December), others annually. As an illustration, Maharashtra deducts from employees earning above a set wage, twice a year, with the employer paying three times the employee amount. The employer deducts, adds its share, and remits to the state welfare board by the due date.
No. It is unrelated. PF is retirement savings and ESI is health insurance; LWF funds general worker-welfare schemes run by a state board, and the amounts are far smaller.
Only employees in states that have a fund, and often only those below a certain designation or wage. Senior managerial staff are excluded in several states.
The employee contribution is generally allowed as a deduction from salary income, similar to professional tax, though the amounts are too small to matter much.
LWF is one line among several statutory deductions; see the full stack in the Take-Home Salary Calculator and the employer cost in the Payroll Cost Calculator. Tracking per-state rules is a job for payroll software.