📅 Introduction: Why June Payroll is Crucial for LWF

As part of statutory compliance obligations under various State Labour Welfare Fund Acts, establishments are mandated to deduct LWF contributions from employees and deposit them along with the employer’s share within specific timelines. For most states, this happens twice a year — and the first cycle (January to June) culminates in July 2025.

To remain compliant, LWF must be deducted in June 2025 payroll and remitted by or before 15th July 2025, along with the filing of relevant returns.

🧾 What is Labour Welfare Fund (LWF)?

Labour Welfare Fund is a statutory welfare contribution collected under individual State Labour Welfare Fund Acts, meant to provide:

• Medical facilities for workers and their families
• Support for children’s education
• Maternity and retirement benefits
• Vocational training
• Marriage assistance
• Recreational amenities
• Emergency relief (e.g., during disasters or pandemics)

LWF is a joint contribution:

• Employer’s Share: Higher, depending on the state
• Employee’s Share: Deducted from salary
• Frequency: Monthly / Half-Yearly / Annually (varies state-wise)

📌 June 2025 Payroll Deduction – States Where It Is Mandatory

Below is a state-wise summary for the July 2025 LWF remittance cycle (based on the January–June 2025 contribution period):

✅ Note: Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, Haryana, and Punjab have either monthly or annual contribution cycles and are not covered in the July remittance period.

🔍 Detailed Employer Checklist for June 2025 LWF Deduction

1. Payroll Processing

• Ensure that employee LWF deduction is included in the June 2025 salary register for all eligible employees.
• Apply deduction state-wise, based on location of the establishment (not employee residence).
• For employees who joined or left during June 2025, apply full amount, unless the relevant state law allows proration (currently, none of the above do).

2. Budgeting Employer Contributions

• Employer contributions are significantly higher (3x in states like Goa and Maharashtra).
• Budget and process these as part of statutory payables before finalising June salary payout.

3. Documentation

• Maintain:
  • Deduction register
  • Employer contribution sheet
  • Payment challan
  • Filed return acknowledgement

4. Remittance & Return Filing

• Payment must be made to the respective Labour Welfare Board account through authorised payment gateways/bank challans.
• Returns must be filed in the respective online portal or state-specified form.

5. System Readiness

• In states like Maharashtra, Gujarat, and MP, state LWF portals have undergone updates.
  Ensure:
  • Valid login credentials
  • Establishment registration
  • DSC activation (if applicable)

💡 Best Practices to Avoid Penalties

🔍 Frequently Asked Questions (FAQs)

❓ Is LWF applicable to all employees?

No. It is generally applicable to non-managerial employees drawing wages below a certain threshold. The definition varies by state. However, many employers deduct it uniformly to avoid compliance gaps.

❓ What if LWF is not deducted in June payroll?

You may have to deduct it later or remit the employer’s entire share yourself. This may also attract penalties under the applicable state rules.

❓ Are LWF contributions tax-deductible?

Yes. The employer contribution is a deductible business expense under Section 37(1) of the Income Tax Act, provided it is paid before the due date.

📢 Conclusion: Compliance is Culture

The Labour Welfare Fund is not just a legal obligation, but a reflection of employer responsibility towards worker well-being.

Ensuring timely deduction in June 2025 payroll, and remitting it on or before 15th July 2025, ensures:

• No late fees or penalties
• Peace of mind during audits
• Continued trust with your employees
• Financial compliance discipline

🔧 Need Assistance with LWF Compliance?

At Prakash Consultancy Services, we provide end-to-end payroll compliance solutions, including:

• LWF calculation
• State-wise challan generation
• Online return filing
• Record maintenance and audit support

📞 Contact us today to streamline your statutory compliance across all states.

➡️ Visit blog.pcsmgmt.com for more such compliance insights.