Labour Welfare Fund (LWF)
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The Labour Welfare Fund (LWF) is a statutory contribution collected by state governments under their respective Labour Welfare Fund Acts. India Payroll automates LWF deduction on Salary Slips based on the employee’s work state and the payroll month.
LWF amounts are flat fixed amounts per employee, not percentages of salary.
1. How to Enable
Section titled “1. How to Enable”- Go to Payroll Settings → India Payroll tab.
- Check Enable LWF Deduction.
- Save.
Enable Labour Welfare Fund
2. Deduction Frequency
Section titled “2. Deduction Frequency”| Frequency | Deduction Months | States |
|---|---|---|
| Monthly | Every month | Haryana, Kerala, Punjab, Chandigarh |
| Half-yearly | June + December | Chhattisgarh, Delhi, Goa, Gujarat, Madhya Pradesh, Maharashtra, Odisha, West Bengal |
| Annual | December only | Andhra Pradesh, Karnataka, Tamil Nadu, Telangana |
3. State-wise Rate Table
Section titled “3. State-wise Rate Table”All amounts are flat fixed contributions per employee per deduction period.
Monthly States
Section titled “Monthly States”| State | Employee (₹) | Employer (₹) |
|---|---|---|
| Haryana | 34 | 68 |
| Kerala | 50 | 50 |
| Punjab | 5 | 20 |
| Chandigarh | 5 | 20 |
Half-Yearly States (June + December)
Section titled “Half-Yearly States (June + December)”| State | Employee (₹) | Employer (₹) |
|---|---|---|
| Chhattisgarh | 15 | 45 |
| Delhi | 0.75 | 2.25 |
| Goa | 60 | 180 |
| Gujarat | 6 | 12 |
| Madhya Pradesh | 10 | 30 |
| Maharashtra | 25 | 75 |
| Odisha | 20 | 40 |
| West Bengal | 3 | 30 |
Annual States (December only)
Section titled “Annual States (December only)”| State | Employee (₹) | Employer (₹) |
|---|---|---|
| Andhra Pradesh | 30 | 70 |
| Karnataka | 50 | 100 |
| Tamil Nadu | 20 | 40 |
| Telangana | 2 | 5 |
Only the employee share is deducted on the salary slip. The employer share is visible in the LWF Register report for remittance purposes.
4. Employment State
Section titled “4. Employment State”LWF is determined by the Employment State set on the Salary Structure Assignment. The same field is used by Professional Tax, so it only needs to be set once per assignment.
5. Per-Employee Exemptions
Section titled “5. Per-Employee Exemptions”Some employees may be exempt from LWF by local law (e.g., contract workers, employees above a certain grade in specific states, or directors). India Payroll provides a per-employee exemption flag.
How to Exempt an Employee
Section titled “How to Exempt an Employee”- Open the Salary Structure Assignment document.
- Go to the Labour Welfare Fund section.
- Check LWF Exempted.
- Fill in LWF Exemption Reason (optional, for audit trail).
Key behaviour: The
lwf_exemptedflag is never auto-overridden by the hook. Only an HR user with write access to the Employee document can change it. This ensures manual exemptions are preserved across all payroll runs.