Labour Welfare Fund (LWF)
Last updated: 13 July 2026. General explainer, not legal or tax advice.
What the Labour Welfare Fund is
The Labour Welfare Fund is a fund run by a state to pay for welfare measures for workers, things like education support, medical help, housing and recreation. It exists under a state labour welfare Act, so it is a state level scheme rather than a central one.
Contributions and how often they are paid
Where a state runs the fund, both the employee and the employer contribute, with the employer usually paying a larger share than the employee. The amounts are small and fixed by the state. How often they are collected varies, some states take it monthly, others half yearly or once a year.
Which states, and who is covered
Only some states operate a Labour Welfare Fund, and the coverage differs. A state Act typically covers workers up to a wage or role threshold it sets. Because the rules are local, an employer with offices in several states may contribute in some and not in others.
What employers must do
In a state with the fund, the employer deducts the employee's small share from salary, adds the employer share, and deposits the total with the state welfare board on the state's schedule. The contribution is a distinct line, separate from provident fund and employee state insurance.
Tracking LWF across states
For a single state employer the welfare fund is a minor, once or twice a year task. It gets fiddly for a company spread across states, because the amount, the frequency and even whether the fund exists all change at the border. A contribution due in June in one state may be due in December in another, or not at all.
The practical answer is a small calendar of which states you operate in, whether each runs a fund, and when its contribution falls. That turns an easy thing to forget into a routine line in the payroll checklist.
Worked example
In a state that collects twice a year, an employer works out the small employee and employer amounts for June and again for December, deposits both shares with the state welfare board by the due dates, and records them against each covered worker.
Related terms
Frequently asked questions
Does every state have a Labour Welfare Fund?
No. It is a state scheme, so only some states run one, and the amount and frequency differ where it exists.
How much is the LWF contribution?
A small fixed amount set by the state, with the employer usually paying a larger share than the employee. Check your state welfare board for the current figure.
Is LWF the same as PF or ESI?
No. Provident fund is retirement savings and employee state insurance is health cover. The welfare fund is a separate state scheme with much smaller amounts.
When is LWF deducted?
On the state's schedule, which may be monthly, half yearly or yearly depending on the state Act.
Who deposits the LWF contribution?
The employer, after deducting the employee share and adding its own, deposits the total with the state labour welfare board.
Do I pay LWF for employees in every state?
Only in states that run a Labour Welfare Fund. The amount and frequency also differ by state, so track each state you operate in separately.
How often is LWF paid?
It depends on the state, monthly, half yearly or yearly. A small calendar of your states and their due dates keeps it from being missed.
Sources and official references
The rules and figures on this page trace to the official sources below. Statutory amounts and dates change, so confirm the current number on the source before you act on it.
How Offrd helps
Offrd records statutory deductions on the payslip, so employees can see each item, including state levies, clearly.