Quick answer: Karnataka Labour Welfare Fund (LWF) is an annual contribution of ₹50 from the employee and ₹100 from the employer per employee. The employee share is deducted from December wages and both shares are paid online, with Form D, by 15 January of the next year. From 7 January 2026, shops, offices and other establishments with 10 or more employees are covered, down from more than 50.
The Karnataka Labour Welfare Fund is set up under the Karnataka Labour Welfare Fund Act, 1965 and run by the Karnataka Labour Welfare Board, which uses it for welfare schemes for workers and their families, such as educational assistance and medical help. Two amendments in two years have changed it: the contribution more than doubled from calendar year 2025, and from January 2026 far smaller employers are covered. Because the only payment of the year falls on 15 January, December payroll is when you need to get it right. This guide covers who is covered, the rate, the due date, Form D and online payment.
Karnataka LWF contribution rate
| Contributor | Per employee per year | Before the 2024 amendment |
|---|---|---|
| Employee (deducted from December wages) | ₹50 | ₹20 |
| Employer | ₹100 | ₹40 |
| Remitted by the employer | ₹150 | ₹60 |
| State Government (paid separately) | ₹50 | ₹20 |
The Karnataka Labour Welfare Fund (Amendment) Act, 2024 replaced "twenty rupees, forty rupees and twenty rupees" in section 7A(2) with "fifty rupees, one hundred rupees and fifty rupees" (text of the 2024 amendment). It was published as Karnataka Act 5 of 2025 on 10 January 2025 and came into force at once; the new rates first applied to the contribution for calendar year 2025, paid by 15 January 2026; the 2024 contribution paid in January 2025 was still ₹20 and ₹40. The amounts are fixed per employee; they do not depend on salary. For other States' rates, use our labour welfare fund calculator.
Who must pay: the 10-employee rule from January 2026
Under section 2(4) of the Act, the following are establishments covered by LWF:
- a factory;
- a motor omnibus service;
- any plantation or workshop;
- any other establishment, including a registered society and a charitable or other trust, that carries on business, trade or related work and employs ten or more persons on any working day in the preceding twelve months (excluding non-factory establishments of the Central or State Government).
The last limit was "more than fifty persons" until the Karnataka Labour Welfare Fund (Amendment) Act, 2025 came into force on 7 January 2026 (text of the 2025 amendment Bill). In practice, this brings most small offices, shops, startups, clinics and agencies in Bengaluru and the rest of Karnataka with 10 to 50 employees into LWF for the first time. Their first contribution is for calendar year 2026, due by 15 January 2027.
Which employees count
The contribution is for each employee whose name is on the establishment's register on 31 December. The Act defines an employee as a person employed for wages to do skilled or unskilled, manual or clerical work, so staff employed mainly in managerial or supervisory roles are commonly treated as outside it. Many employers still pay for all staff to be safe. Fines realised from employees and unpaid accumulations (amounts due to employees that have stayed unpaid for three years, excluding provident fund) must also be paid to the Board, every quarter, with a statement.
Due date and Form D
| Step | When |
|---|---|
| Deduct ₹50 from each covered employee | December wages |
| Pay employee and employer shares (₹150 per employee) | On or before 15 January of the next year |
| File the statement of contributions in Form D | With the payment, by 15 January |
| Fines and unpaid accumulations | Quarterly, by 15 April, 15 July, 15 October and 15 January |
Form D is the annual statement of contributions paid (Rule 3A, Karnataka Labour Welfare Fund Rules, 1968). Employers also send an extract of the wages register in Form B by 31 January (Rule 29). Add 15 January to your payroll compliance calendar.
Example
A Bengaluru software firm has 18 employees on 31 December 2026, all doing technical or clerical work, so it is newly covered. It deducts ₹50 from each employee's December salary (18 × ₹50 = ₹900), adds its own share (18 × ₹100 = ₹1,800) and pays ₹2,700 to the Board with Form D by 15 January 2027. Under the old more-than-50 limit, it would not have been covered at all.
How to pay Karnataka LWF online
- Register: register the establishment with the Karnataka Labour Welfare Board on its online portal.
- Count employees: list the employees on the register on 31 December and work out ₹150 for each.
- Pay online: pay through the portal by net banking, NEFT, RTGS or UPI; after the 2025 amendment, cheques are no longer an accepted mode and demand draft is the only offline option.
- File Form D: submit the statement of contributions with the payment and keep the acknowledgement with December's payroll.
Late payment
The Act allows the Welfare Commissioner to issue a notice of demand for unpaid amounts, charges simple interest on unpaid contributions, accumulations or fines if the notice is not complied with: 12% a year for the first three months, then 18% (section 7B), and allows recovery of dues. Because the contribution is due only once a year, a missed 15 January leaves the whole year's amount outstanding. For how this compares with other payroll penalties, see our payroll penalties guide.
Karnataka vs Maharashtra LWF
- Frequency: Karnataka once a year (December); Maharashtra twice (June and December).
- Amount per employee per year: Karnataka ₹50 + ₹100; Maharashtra ₹50 + ₹150 (₹25 + ₹75 twice).
- Coverage: both now cover establishments with relatively few employees (Karnataka 10 or more, Maharashtra 5 or more).
Details for Maharashtra are in our Maharashtra LWF guide. Karnataka employers should also check Karnataka professional tax, which is a separate monthly deduction.
Get every statutory deduction right. The Indian Salary & Payroll Management e-Book explains PF, ESI, PT, LWF and TDS with worked examples, due dates and checklists.
Frequently asked questions
What is the Labour Welfare Fund contribution in Karnataka?
From calendar year 2025, after the 2024 amendment, the yearly contribution is 50 rupees from each employee and 100 rupees from the employer, so the employer remits 150 rupees per employee. The State Government adds 50 rupees per employee. Earlier the amounts were 20, 40 and 20 rupees.
Which establishments must pay Karnataka LWF?
Factories, motor omnibus services, plantations and workshops are covered, and from 7 January 2026 any other establishment, including societies and trusts carrying on business or trade, that employs ten or more persons on any working day in the preceding twelve months. Before that the limit for these establishments was more than fifty persons.
What is the due date for Karnataka LWF?
Karnataka LWF is paid once a year. The employee share is deducted from December wages, and the employer pays both shares to the Karnataka Labour Welfare Board, with the statement in Form D, on or before 15 January of the following year. For calendar year 2026, the last date is 15 January 2027.
How do I pay Karnataka LWF online?
Payment is made online through the Karnataka Labour Welfare Board's portal. After the 2025 amendment, contributions are paid through online channels such as net banking, NEFT, RTGS or UPI, with demand draft as the remaining offline option; cheques are no longer listed.
Is LWF deducted every month in Karnataka?
No. Karnataka LWF is an annual deduction of 50 rupees from the December salary of each covered employee, not a monthly deduction.
Position as of 15 November 2026. Based on the Karnataka Labour Welfare Fund Act, 1965 as amended by the Karnataka Labour Welfare Fund (Amendment) Acts of 2024 and 2025, and the Karnataka Labour Welfare Fund Rules. General information, not legal advice.