Labour welfare fund contribution is a small payroll levy that a state collects from employers and employees under its own welfare fund Act, and Maharashtra, Gujarat, Delhi, Karnataka, Tamil Nadu, Kerala, Andhra Pradesh, Telangana, Punjab, Haryana, Madhya Pradesh, Goa, Odisha and West Bengal all charge one. An inspector asks for your labour welfare fund contribution records and you have never heard of it. There is no central Act to look up, because the fund is a creature of state law: Maharashtra and Gujarat run theirs under a 1953 Act, Tamil Nadu under one from 1972, Kerala under one from 1975. It is a small deduction paid a couple of times a year, and the reason it goes unnoticed for years is that what it usually catches is your office payroll, not the gang on your site.

There is no national labour welfare fund

Start with the thing that makes this topic confusing. Ask what the labour welfare fund rate is in India and the question has no answer, because there is no Indian labour welfare fund. There are state funds, each set up by its own Act, each with its own coverage test and its own notified figures.

The Bombay Labour Welfare Fund Act, 1953 is the oldest of the common ones and still governs Maharashtra (which renamed its copy the Maharashtra Labour Welfare Fund Act in 2012), Gujarat and Delhi, carrying decades of state amendments. Tamil Nadu has the Tamil Nadu Labour Welfare Fund Act, 1972. Kerala has the Kerala Labour Welfare Fund Act, 1975. Several other states run funds under their own legislation, and some states run none at all.

For a contractor working across state lines, that is the whole practical problem in one sentence. Your obligation changes with the state, not with the client and not with the job.

Which states charge labour welfare fund contribution

These fourteen run a fund for ordinary establishments, each under the Act its own labour welfare board or labour department names. The list is what those official pages showed in October 2026; a state missing from it may still run a fund, so check before you assume you owe nothing. How often the money is due comes from the state’s own text where it says so. The amount does not appear here, for the reason set out further down.

State The Act How often it is paid
Maharashtra Maharashtra Labour Welfare Fund Act, 1953 (the Bombay Act, renamed in 2012) Every six months, for employees on the register on 30 June and 31 December
Gujarat Bombay Labour Welfare Fund Act, 1953, as it applies in Gujarat Ask the Gujarat Labour Welfare Board
Delhi Bombay Labour Welfare Fund Act, 1953, as extended to Delhi Every six months, for employees on the register on 30 June and 31 December
Karnataka Karnataka Labour Welfare Fund Act, 1965 Once a year for the calendar year; the 2025 contribution was due by 15 January 2026
Tamil Nadu Tamil Nadu Labour Welfare Fund Act, 1972 Ask the Tamil Nadu Labour Welfare Board
Kerala Kerala Labour Welfare Fund Act, 1975 Ask the Kerala Labour Welfare Fund Board
Andhra Pradesh Andhra Pradesh Labour Welfare Fund Act, 1987 Every year
Telangana Andhra Pradesh Labour Welfare Fund Act, 1987, as it applies in Telangana Once a year, per worker
Punjab Punjab Labour Welfare Fund Act, 1965 Ask the Punjab Labour Welfare Board
Haryana Punjab Labour Welfare Fund Act, 1965, as it applies in Haryana Every month, under section 9A
Madhya Pradesh Madhya Pradesh Shram Kalyan Nidhi Adhiniyam, 1982 Ask the MP Shram Kalyan Mandal
Goa Goa, Daman and Diu Labour Welfare Fund Act, 1986 Half-yearly: January to June by 31 July, July to December by 31 January
Odisha Odisha Labour Welfare Fund Act (the state’s own pages date it both 1996 and 2005) Ask the Odisha Labour Welfare Board
West Bengal West Bengal Labour Welfare Fund Act, 1974 Half-yearly, for the periods ending 30 June and 31 December

The headcount that brings an office or shop inside differs too. Maharashtra and Tamil Nadu count establishments with five or more persons; West Bengal and Haryana set ten for shops and commercial establishments; Odisha sets twenty. Professional tax works the same way, state by state, and professional tax for contractors sets out the two registrations it asks for.

Why your site gang may not be what triggers it

The definition of establishment is where this stops behaving the way contractors expect.

The Bombay Act defines an establishment as a factory; a tramway or motor omnibus service; or any establishment within the meaning of the Shops and Establishments Act which employs, or on any working day during the preceding twelve months employed, ten or more persons. The Act adds a proviso: such an establishment continues to be covered despite a later fall below ten, and only ceases to be one where the number has been under ten for a continuous period of not less than three months.

That is the Act as written in 1953. Maharashtra cut the figure from ten to five in 1984, in the cessation proviso as well, and added motor transport undertakings to which the Motor Transport Workers Act, 1961 applies. So in Maharashtra five people at your office or workshop are enough.

Read the list again and look for construction. It is not there. A site is not a factory, it is not a bus service, and it is not a shop.

That reading holds for the Bombay text. Haryana’s definition, in the Punjab Act of 1965 as it applies there, is wider: besides shops and commercial establishments with ten or more employees, it reaches any premises where an industry, in the Industrial Disputes Act sense, is carried on. In Haryana, read the definition before deciding a site is outside it.

What is on that list is the place you run the business from. Your registered office, your workshop counter, your hire desk — those are shops and establishments units, and once ten people are on that payroll the Act has found you. This is why the notice, when it comes, is about eleven office and workshop staff rather than about the forty men who were on a site last season.

It also explains the shape of the mistake. Owners check their site headcount, conclude the levy is somebody else’s problem, and are looking at the wrong payroll entirely.

Who counts as an employee

The employee definition is wide at the bottom and closed at the top.

An employee is any person employed for hire or reward to do any work, skilled or unskilled, manual, clerical, supervisory or technical, in an establishment. So a storekeeper, a fitter, a billing clerk and a yard supervisor are all inside.

Maharashtra’s version adds that the person may be employed directly by the employer or through a contractor or any other agency, so contract staff working in your office or workshop count, not only the people on your own payroll. It also leaves out apprentices engaged under the Apprentices Act, 1961.

Two exclusions sit on top. A person employed mainly in a managerial capacity is out. A person in a supervisory capacity is out where he draws wages above the ceiling written into that state’s Act, or where the duties or powers of the post mean he exercises mainly managerial functions. The wage ceiling is a state figure that has been amended over the years, so read the current version of the Act that applies to you rather than a number from an article.

The employer side is defined just as practically: it includes, in a factory, the person named as manager under the Factories Act, and in any establishment, the person responsible to the owner for the supervision and control of the employees or for the payment of wages. If you sign the wage sheet, this is aimed at you.

Labour welfare fund contribution: why no rate table here

You will find rate tables for this levy all over the internet, usually undated and copied from each other.

The contribution itself is defined in the Bombay Act as the sum payable to the Board under its contribution section, and the actual employer and employee figures, along with the due dates, are notified by the state and revised from time to time. A table that was right for one state two revisions ago is not a useful thing to publish, because a contractor will deduct against it and the shortfall surfaces at inspection with interest attached.

So the honest version is the method rather than the number. Identify which state Act covers each of your establishments. Get the current employer and employee contribution and the due dates from that state’s labour welfare board or from your payroll adviser. Deduct the employee share, add the employer share, and pay on the notified cycle rather than when someone asks.

It is not the BOCW cess, and it is not PF

Three payroll-adjacent levies get mixed up on a construction business, and paying one does nothing for the others.

Levy Charged on Set by
Labour welfare fund contribution Each covered employee, periodically A state welfare fund Act
BOCW labour cess The cost of construction on a project The Code on Social Security, 2020, section 100, which replaced the 1996 Cess Act from 21 November 2025; paid to the state building workers’ welfare board
Provident fund and ESI Wages, monthly, at statutory rates Central social security legislation, now the same Code

The cess side is covered in labour cess on construction bills, along with who actually bears it when it is deducted from your running account bill. The social security side is in PF and ESI for construction workers. And registration under the building and construction workers legislation, which is again a separate exercise, is in BOCW registration in India.

If you engage a labour contractor rather than employing the gang directly, the welfare fund question follows the establishment each employee works in, and in Maharashtra a person employed through a contractor still counts, which makes it worth reading alongside the labour licence for contractors and the duties that come with it.

Mines are a separate line entirely

One more thing, for owners whose machines work in quarrying and mining.

Parliament legislated sector-specific welfare funds long before the state Acts spread: the Mica Mines Labour Welfare Fund Act, 1946, the Coal Mines Labour Welfare Fund Act, 1947 and the Limestone and Dolomite Mines Labour Welfare Fund Act, 1972 among them. Most of that layer has since been taken down. The Finance Act, 2016 abolished the mica and limestone-and-dolomite cesses from 1 April 2016, the Repealing and Amending Act, 2017 repealed both of those Acts in full, and the Repealing and Amending Act, 2019 did the same for the iron ore, manganese ore and chrome ore mines welfare cess and fund Acts of 1976.

What carries on is a Ministry of Labour and Employment welfare scheme for beedi, cine and non-coal mine workers, run through its Labour Welfare Organisation regions. That is a benefit for the workers, not a levy on your fleet. So if your machines work a limestone quarry, there is no separate central cess to pay: the contribution question is your state’s Act, and the quarry workers may be able to draw on the central scheme. Asking your adviser about the right one by name still saves a long conversation.

Check headcount at your office and workshop for welfare fund

Labour welfare fund contribution is a small amount that becomes an expensive conversation because nobody set it up. The one thing worth doing this week is checking the headcount at your office and workshop rather than at your sites, because ten people on that payroll, five in Maharashtra or Tamil Nadu, is what usually brings the state Act into play.

Find out which state Act covers each establishment you run, get the current figures and cycle from the state board, and put it on the payroll calendar next to PF. Sound compliance records are also what makes a firm fundable when it wants to grow, and that matters when you are weighing equipment finance and working capital options for the next machine.

Rates, schemes, state notifications and wage ceilings change — confirm current terms with your state labour welfare board or payroll adviser before deducting or paying. Prices, specifications and features are indicative, vary by variant, location and date, and should always be confirmed with the official OEM or authorised dealer before any purchase decision. DesiMachines is not liable for decisions taken on the basis of information that may have changed after publication.