Labour Welfare Fund (LWF) Slab in Tamil Nadu
Labour Welfare Fund
The Tamilnadu Labour Welfare Board was constituted by the Government of Tamilnadu in the year 1971 by an executive order of the Government (G.O.Ms No.222 Labour Dept, dated: 20.2.1971) with the view to promote the Welfare of the employees and their dependents with an adhoc grant of Rs.5 lakh. The Tamil Nadu Labour Welfare Fund Act, 1972 was passed by the State and was given effect from 1.1.1973. The Statutory Labour Welfare Board was formed with effect from 1.4.1975 with the Minister In-charge of Labour as Chairman, five representatives of employees, five representatives of employers, three members of the State Legislative Assembly, four Official members and two Non-Official members.
Under the Tamil Nadu Labour Welfare Fund Act, 1972, the Labour Welfare Fund (LWF) applies to any commercial establishment, factory, shop, IT/ITeS company, or motor transport undertaking in Tamil Nadu that employs 5 or more persons. Registration and management are handled via the Tamil Nadu Labour Welfare Board.
Covered Establishments
- Factories under the Factories Act, 1948
- Motor transport and plantation undertakings
- Shops and commercial establishments
- Catering establishments with 5 or more workers
- IT and ITeS corporate offices and firms
Contributions and Payment Schedule
- Deduction Frequency: Annual, deducted once a year by December 31
- Filing Returns: Due by January 31 of the following year
- Employee Contribution: ₹20 per employee per year
- Employer Contribution: ₹40 per employee per year
- Total Annual Contribution: ₹60 per employee
Exemptions
- Managerial staff
- Supervisory employees earning above ₹15,000 per month (depending on definition thresholds)
- Apprentices and part-time workers
- Employees who have worked for less than 30 days during the preceding 12 months
Tamil Nadu Labour Welfare Fund Overview
The Tamil Nadu Labour Welfare Fund (LWF) contribution is an annual flat-rate fee rather than a graded wage slab. The employee contributes ₹20 per year (deducted from December wages), and the employer contributes ₹40 per year per employee, bringing the total annual contribution to ₹60 per employee.
Contribution Breakdown
- Employee Share: ₹20.00 per year (deducted once a year from December salary)
- Employer Share: ₹40.00 per year per employee
- Total Combined Contribution: ₹60.00 per employee annually
Key Compliance Rules & Exclusions
- Due Date: Annually by January 31st of the following year for the preceding calendar year via the official Tamil Nadu LWMIS Portal.
- Applicability: Commercial establishments, shops employing 5 or more persons, factories, motor transport undertakings, and plantations.
- Exclusions (Who is exempt): Apprentices, part-time workers, and persons employed in a managerial or supervisory capacity drawing wages exceeding ₹15,000 per month.
Tamil Nadu Labour Welfare Fund Slab 2026
The Tamil Nadu Labour Welfare Fund (LWF) is governed by the Tamil Nadu Labour Welfare Fund Act, 1972 and the corresponding rules. For the 2026 payroll year, the contribution is a fixed annual amount per eligible employee, rather than a salary-based slab.
The latest Tamil Nadu Labour Department policy note states that the contribution is ₹20 from the employee, ₹40 from the employer, and ₹20 from the Government per worker per year.
Tamil Nadu Labour Welfare Fund Contribution – 2026
| Contributor | Contribution per Employee / Year |
|---|---|
| Employee | ₹20 |
| Employer | ₹40 |
| Government | ₹20 |
| Total Labour Welfare Fund | ₹80 |
Important Point
There is no salary-wise LWF slab such as ₹10,000, ₹20,000 or ₹50,000 salary categories. The applicable contribution is based on the employee's coverage under the Tamil Nadu Labour Welfare Fund provisions.
Who Contributes to the Tamil Nadu LWF?
The Labour Welfare Fund covers employees in establishments such as:
- Factories
- Plantations
- Motor transport undertakings
- Shops and commercial establishments
- Catering establishments
- Other establishments covered under the Act and Rules
Example of LWF Calculation
Suppose a company has 100 eligible employees:
| Contribution | Calculation | Amount |
|---|---|---|
| Employee contribution | 100 × ₹20 | ₹2,000 |
| Employer contribution | 100 × ₹40 | ₹4,000 |
| Government contribution | 100 × ₹20 | ₹2,000 |
| Total LWF | ₹8,000 |
Tamil Nadu LWF vs Professional Tax
| Particular | Labour Welfare Fund | Professional Tax |
|---|---|---|
| Nature | Welfare contribution | State tax |
| Basis | Fixed annual contribution | Salary/income slab |
| Employee contribution | ₹20/year | Depends on applicable PT slab |
| Employer contribution | ₹40/year | Employer deducts employee PT |
| Government contribution | ₹20/year | Not applicable |
| Administered by | Tamil Nadu Labour Welfare Board | Relevant tax authority |
Payroll Compliance for Employers
- Eligible employees are identified correctly.
- The employee's ₹20 annual contribution is recovered through payroll.
- The employer adds ₹40 per eligible employee.
- Contributions are remitted within the prescribed period.
- Required returns and records are maintained.
- Employee and employer contributions are correctly reflected in payroll records.
City-Specific Information
The contribution structure across major cities in Tamil Nadu—including Chennai, Coimbatore, Tiruchirappalli, Madurai, Salem, and Hosur—follows the standard Tamil Nadu Labour Welfare Fund Act, 1972. There are no separate city-wise rates or salary slabs.
Conclusion
The Tamil Nadu Labour Welfare Fund (LWF) contribution is an annual flat-rate fee rather than a graded wage slab. The employee contributes ₹20 per year (deducted from December wages), and the employer contributes ₹40 per year per employee, bringing the total annual contribution to ₹60 per employee.
With InnBuilt, businesses can be managed by individual State Labour Welfare Boards by turning on the Labour Welfare Fund (LWF) for Tamil Nadu, while managing attendance, leave, shifts, and payroll from one platform.