Karnataka LWF is an annual contribution: ₹50 from the employee, ₹100 from the employer and ₹50 from the State Government for each employee on the register on 31 December. The employer deducts the employee share from December wages and pays ₹150 per employee online by 15 January of the next year. The rates were raised from ₹20, ₹40 and ₹20 by Karnataka Act 05 of 2025.
LWF contribution in Karnataka
The contribution is fixed by section 7A of the Karnataka Labour Welfare Fund Act, 1965.
| Who pays | Amount per employee a year |
|---|---|
| Employee (deducted from December wages) | ₹50 |
| Employer | ₹100 |
| Paid by the employer to the Board | ₹150 |
| State Government (paid separately) | ₹50 |
Section 7A(2) as amended by the Karnataka Labour Welfare Fund (Amendment) Act, 2024 (Karnataka Act 05 of 2025, notification DPAL 60 SHASANA 2024 of 10 January 2025). The Board's press note of 5 December 2025 confirms ₹150 per employee for calendar year 2025.
When to deduct and pay
- Count employees on the register on 31 December and deduct ₹50 from December wages (section 7A(2) and (4)).
- Pay on or before 15 January of the following year (section 7A(3)). For 2025 the Board set 15 January 2026. Payment is online only.
Who is covered
- Factories, motor omnibus services, plantations and workshops (section 2(4)).
- Other establishments, societies and trusts employing more than 50 persons in the Act text we read. The Board's press note lists factories with 10 or more workers using power or 20 without, contract-labour establishments with 20 or more, and shops, IT-BT and charitable establishments with 50 or more.
- An Amendment Bill passed in 2025 lowers the threshold to 10 or more persons and allows NEFT, RTGS and UPI; we could not confirm its notification, so check with the Board.
Not covered: The Act covers any person employed for wages for skilled or unskilled, manual or clerical work (section 2(2)); the text we read has no salary ceiling.
Late payment, interest and where to pay
After a demand notice, simple interest of 12% a year for the first three months and 18% a year after that (section 7B), repeated in the Board's 2025 press note.
Online payment at klwbapps.karnataka.gov.in, as directed in the Board's press note.
Worked example
A Mysuru packaging unit (a factory using power) has 3 workers on the register on 31 December 2026, earning ₹16,000, ₹18,500 and ₹22,000.
| Item | Calculation | Amount |
|---|---|---|
| Deducted from December 2026 wages | 3 × ₹50 | ₹150 |
| Employer share | 3 × ₹100 | ₹300 |
| Paid online by 15 January 2027 | ₹150 + ₹300 | ₹450 |
Salary does not change the amount. A worker who left in November is not counted; one who joined on 28 December is. If the payment is 2 months late after a demand notice, interest at 12% a year on ₹450 is about ₹9.
What we could not confirm
Not found on an official source on 21 October 2026, so not stated as fact here:
- Notification of the 2025 amendment lowering coverage to 10 persons
Keep LWF in the same payroll run as PF and ESI
LWF is small, but it is a separate deduction with its own dates, and it is the one most often forgotten. FundRaksha HR runs payroll with PF, ESI and professional tax, and lets you add LWF as a fixed deduction in the months your State collects it, so payslips show it correctly. Check the other deductions with the PF calculator and ESI calculator, and see every State on the labour welfare fund by state page.
Sources
- klwb.karnataka.gov.in/uploads/Contribution%202025%20Press%20Note%20&%20Gazette%20Copy_1765
- klwb.karnataka.gov.in/48/payment-of-contribution-for-the-calander-year-2025-press-note/kn
- web.archive.org/web/20240626064232id_/https://www.indiacode.nic.in/bitstream/123456789/760
- kla.kar.nic.in/council/house/bills/157/03eng.pdf
Last reviewed: 2026-10-21. Information for Indian businesses; not legal advice.