Karnataka Labour Welfare Fund Contribution 2025: Complete Compliance Guide for Employers

Karnataka Labour Welfare Fund Contribution 2025: Complete Compliance Guide for Employers. The Government of Karnataka, through the Department of Labour and the Karnataka Labour Welfare Board, has issued an important press note dated 05 December 2025 regarding mandatory contribution to the Karnataka Labour Welfare Fund (KLWF). This notification brings clarity on the applicability, contribution amount, payment mode, due date, and penalties for delay.
Every employer operating in Karnataka must carefully understand this notification to avoid interest, inspections, and legal action. The Labour Welfare Fund is a statutory contribution aimed at improving the social, educational, medical, and welfare facilities of workers in the state.
This article explains the notification in a clear and easy manner so that employers, HR professionals, accountants, and business owners can comply without confusion.
What Is the Karnataka Labour Welfare Fund?
The Karnataka Labour Welfare Fund is a statutory fund created under the Karnataka Labour Welfare Fund Act, 1965. The fund is used for worker welfare activities such as education, health facilities, housing support, recreational activities, and financial assistance.
The contribution to this fund is mandatory for eligible establishments and must be paid every calendar year within the prescribed timeline.
Applicability of the Labour Welfare Fund Contribution

Factories, plantations, and workshops: These establishments involve organised industrial or manufacturing activities and employ a defined workforce. To support employee welfare and working conditions, such units are mandatorily required to contribute to the Labour Welfare Fund.

Motor bus transport undertakings: Transport businesses operating buses for commercial purposes employ drivers, conductors, and support staff. Since these employees fall within the scope of labour welfare legislation, such undertakings must pay the Labour Welfare Fund contribution.

Rental service establishments: Businesses providing rental or leasing services employ workers for administration, operations, and maintenance. These establishments are covered to ensure that employees engaged in service-based operations receive welfare benefits.

Establishments employing 10 or more workers with power: Units using electrical or mechanical power and employing ten or more workers are considered organised workplaces with higher operational risks, making them liable for Labour Welfare Fund contribution.

Establishments employing 20 or more workers without power: Even where power is not used, establishments with a workforce of twenty or more workers are covered to ensure welfare benefits for a substantial number of employees.

Establishments covered under the Contract Labour Act, 1970 employing 20 or more contract workers: Organisations engaging contract labour in significant numbers are required to contribute so that contract workers are also included in labour welfare schemes.

Establishments registered under the Karnataka Shops and Commercial Establishments Act, 1961: Shops, offices, and commercial establishments registered under this Act are included to extend welfare benefits to employees in retail and service sectors.

Establishments registered under the Karnataka Society Registration Act, 1960: Societies employing staff for administrative or operational purposes are covered, as employees of registered societies are also entitled to labour welfare protection.

Commercial and IT/BT establishments employing 50 or more employees: Large commercial and technology-driven establishments are specifically covered due to the size of their workforce and the need to ensure structured employee welfare mechanisms.

Charitable trusts, societies, and registered organisations: Even though such organisations may operate on a non-profit basis, once they employ workers, they are required to contribute to the Labour Welfare Fund to safeguard employee welfare.

Legal Basis of the Contribution

Statutory amendment to the Karnataka Labour Welfare Fund Act, 1965: The requirement to pay Labour Welfare Fund is not optional. It is backed by law through an amendment to the existing Act, giving it full legal authority.

Government Notification dated 10 January 2025: This notification formally introduced the new compliance requirement and serves as the official legal reference for employers and enforcement authorities.

Insertion of Section 7A: Section 7A was added to the Act to specifically provide for annual Labour Welfare Fund contributions, removing any ambiguity regarding frequency or applicability.

Mandatory contribution from both employer and employee: The law clearly states that both parties must contribute every year, ensuring shared responsibility for employee welfare.

Enforceable legal obligation: Since the provision is part of the Act, Labour Department officers are legally empowered to inspect, issue notices, and recover dues in case of default.

Contribution Amount for 2025

Employee contribution of Rs.50 per year: Each employee contributes a fixed amount annually toward welfare schemes under the Fund.

Employer contribution of Rs.100 per year: The employer contributes a higher amount as part of their statutory responsibility for employee welfare.

Total contribution of Rs.150 per employee per year: The combined contribution ensures sufficient funding for labour welfare initiatives.

Employer responsible for deduction: The employer must deduct the employee’s share from wages and maintain proper payroll records.

Employer responsible for remittance: The employer must deposit the entire amount both shares together within the prescribed timeline to ensure full compliance.

Mode of Payment
The notification clearly states that payment must be made online only.
The official payment portal is:
 https://klwbapps.karnataka.gov.in
Offline payments are not permitted. Employers must ensure correct details while making payment, including establishment registration details and employee count.
Due Date for Payment

Last date for payment: 15 January 2026

Contribution year: Calendar Year 2025

Employers should not wait until the last date, as portal issues or errors may lead to delay and penalties.
Penalty for Late Payment
The notification imposes strict consequences on employers who fail to deposit the Labour Welfare Fund contribution within the prescribed due date. These penalties are intended to ensure timely compliance and discourage employers from delaying statutory payments. Late payment not only increases the financial burden but also exposes the establishment to regulatory and legal action.
Consequences of delayed payment include:

Interest for the first three months: If payment is delayed up to three months, interest is charged at 12% per annum on the outstanding amount, increasing the cost of compliance.

Higher interest after three months: When the delay exceeds three months, the interest rate rises to 18% per annum, making prolonged non-compliance significantly expensive.

Labour inspections: Labour Department officers may conduct inspections to verify employee records, wage registers, and compliance status.

Legal proceedings: Authorities are empowered to initiate legal action to recover unpaid contributions.

Recovery measures: Recovery proceedings may be initiated to collect dues from the employer.

Impact on other compliances: Continued non-compliance can result in stricter scrutiny during other labour law filings and future inspections.

Why Compliance Is Important
Paying the Labour Welfare Fund is not a procedural or optional requirement; it is a statutory obligation imposed by law. Compliance reflects an employer’s commitment to employee welfare and adherence to labour regulations. Ignoring or delaying this payment can create financial, legal, and operational complications for the business.
Failure to comply can lead to the following consequences:

Financial burden due to interest: Delayed payment attracts statutory interest, increasing the total amount payable and creating unnecessary financial strain.

Legal notices and departmental action: Non-payment may result in notices from the Labour Department and initiation of legal proceedings for recovery.

Issues during labour inspections: During inspections, non-compliance can lead to adverse observations, additional scrutiny, and follow-up actions.

Impact on business reputation: A record of labour law non-compliance can negatively affect the organisation’s credibility with authorities, auditors, and stakeholders.

Timely payment helps ensure smooth business operations, regulatory compliance, and peace of mind, while avoiding avoidable penalties and legal risks.
Practical Steps for Employers
To ensure smooth and timely compliance with the Labour Welfare Fund requirements, employers should follow a clear and systematic approach. Taking these steps in advance helps avoid errors, delays, and penalties.

Verify whether your establishment is covered: Employers should first check whether their establishment falls under the categories specified in the notification. This involves reviewing the nature of business, registration status, and employee strength to confirm applicability.

Finalise employee strength for 2025: Determine the total number of employees for the calendar year 2025 based on payroll and attendance records. Accurate employee count is essential for correct calculation of contribution.

Calculate total contribution: Once the employee strength is finalised, calculate the total payable amount by applying the prescribed contribution rate per employee. This ensures correct payment without shortfall or excess.

Visit the official KLWF portal: Access the official Karnataka Labour Welfare Board portal and log in using the establishment’s registration details to initiate the payment process.

Complete online payment before 15 January 2026: Make the payment well before the due date to avoid last-minute technical issues, delays, or interest liability.

Save payment receipt for records and audits: After payment, download and safely store the receipt as proof of compliance. This document may be required during audits, inspections, or future verification.

Conclusion
The Karnataka Labour Welfare Fund notification dated 05 December 2025 reinforces the importance of statutory compliance for employers. The contribution amount, due date, and penalties are clearly defined, leaving no room for ambiguity.
Employers should treat this obligation seriously and complete payment well before 15 January 2026 to avoid interest, inspections, and legal complications. Timely compliance supports employee welfare and ensures smooth business operations in Karnataka.
Karnataka Govt Issues KLWF Contribution Notice for 2025:

Frequently Asked Questions (FAQs)
Q1. Is Labour Welfare Fund payment compulsory in Karnataka?
Ans. Yes, payment of the Labour Welfare Fund is compulsory for eligible establishments in Karnataka under the Karnataka Labour Welfare Fund Act, 1965. Employers covered by the Act must comply annually to avoid penalties and legal consequences.
Q2. What is the total contribution per employee?
Ans. The total Labour Welfare Fund contribution is Rs.150 per employee per year, which includes both the employer’s and employee’s share. The combined amount must be deposited by the employer within the prescribed due date.
Q3. Who is responsible for paying the contribution?
Ans. The employer is responsible for deducting the employee’s share from wages and depositing the full Labour Welfare Fund contribution online with the Karnataka Labour Welfare Board on or before the due date.
Q4. Is online payment compulsory?
Ans. Yes, as per the latest notification, Labour Welfare Fund contributions in Karnataka must be paid only through the online payment mode. Offline payments are not permitted under the current compliance framework.
Q5. What is the last date for KLWF payment for 2025?
Ans. The due date for payment of Karnataka Labour Welfare Fund contribution for the year 2025 is 15 January 2026. Employers must ensure timely payment to avoid interest and penalties.
Q6. What happens if payment is delayed?
Ans. If the contribution is paid late, interest is charged at 12% for the first three months and 18% thereafter. Continued default may also attract penalties or legal action by authorities.
Q7. Are IT and BT companies covered?
Ans. Yes, IT and BT companies employing 50 or more employees are covered under the Karnataka Labour Welfare Fund Act and are required to pay the prescribed contribution within the specified timelines.
Q8. Do charitable trusts need to pay KLWF?
Ans. Yes, charitable trusts and registered organisations are required to pay Labour Welfare Fund contribution if they fall within the scope of the Act and meet the prescribed employee strength criteria.
Q9. Is contribution required for contract workers?
Ans. Yes, establishments engaging 20 or more contract workers are required to pay Labour Welfare Fund contribution for such workers, ensuring their welfare benefits under the Karnataka Labour Welfare Fund Act.
Q10. Where can employers get clarification?
Ans. Employers can seek clarification from the Karnataka Labour Welfare Board using official contact details provided in notifications or obtain professional compliance assistance for accurate guidance and timely compliance.

The Government of Karnataka, through the Department of Labour and the Karnataka Labour Welfare Board, has issued an important press note dated 05 December 2025 regarding mandatory contribution to the Karnataka Labour Welfare Fund (KLWF). This notification brings clarity on the applicability, contribution amount, payment mode, due date, and penalties for delay.

Every employer operating in Karnataka must carefully understand this notification to avoid interest, inspections, and legal action. The Labour Welfare Fund is a statutory contribution aimed at improving the social, educational, medical, and welfare facilities of workers in the state.

This article explains the notification in a clear and easy manner so that employers, HR professionals, accountants, and business owners can comply without confusion.

What Is the Karnataka Labour Welfare Fund?

The Karnataka Labour Welfare Fund is a statutory fund created under the Karnataka Labour Welfare Fund Act, 1965. The fund is used for worker welfare activities such as education, health facilities, housing support, recreational activities, and financial assistance.

The contribution to this fund is mandatory for eligible establishments and must be paid every calendar year within the prescribed timeline.

Applicability of the Labour Welfare Fund Contribution

Factories, plantations, and workshops: These establishments involve organised industrial or manufacturing activities and employ a defined workforce. To support employee welfare and working conditions, such units are mandatorily required to contribute to the Labour Welfare Fund.
Motor bus transport undertakings: Transport businesses operating buses for commercial purposes employ drivers, conductors, and support staff. Since these employees fall within the scope of labour welfare legislation, such undertakings must pay the Labour Welfare Fund contribution.
Rental service establishments: Businesses providing rental or leasing services employ workers for administration, operations, and maintenance. These establishments are covered to ensure that employees engaged in service-based operations receive welfare benefits.
Establishments employing 10 or more workers with power: Units using electrical or mechanical power and employing ten or more workers are considered organised workplaces with higher operational risks, making them liable for Labour Welfare Fund contribution.
Establishments employing 20 or more workers without power: Even where power is not used, establishments with a workforce of twenty or more workers are covered to ensure welfare benefits for a substantial number of employees.
Establishments covered under the Contract Labour Act, 1970 employing 20 or more contract workers: Organisations engaging contract labour in significant numbers are required to contribute so that contract workers are also included in labour welfare schemes.
Establishments registered under the Karnataka Shops and Commercial Establishments Act, 1961: Shops, offices, and commercial establishments registered under this Act are included to extend welfare benefits to employees in retail and service sectors.
Establishments registered under the Karnataka Society Registration Act, 1960: Societies employing staff for administrative or operational purposes are covered, as employees of registered societies are also entitled to labour welfare protection.
Commercial and IT/BT establishments employing 50 or more employees: Large commercial and technology-driven establishments are specifically covered due to the size of their workforce and the need to ensure structured employee welfare mechanisms.
Charitable trusts, societies, and registered organisations: Even though such organisations may operate on a non-profit basis, once they employ workers, they are required to contribute to the Labour Welfare Fund to safeguard employee welfare.

Legal Basis of the Contribution

Statutory amendment to the Karnataka Labour Welfare Fund Act, 1965: The requirement to pay Labour Welfare Fund is not optional. It is backed by law through an amendment to the existing Act, giving it full legal authority.
Government Notification dated 10 January 2025: This notification formally introduced the new compliance requirement and serves as the official legal reference for employers and enforcement authorities.
Insertion of Section 7A: Section 7A was added to the Act to specifically provide for annual Labour Welfare Fund contributions, removing any ambiguity regarding frequency or applicability.
Mandatory contribution from both employer and employee: The law clearly states that both parties must contribute every year, ensuring shared responsibility for employee welfare.
Enforceable legal obligation: Since the provision is part of the Act, Labour Department officers are legally empowered to inspect, issue notices, and recover dues in case of default.

Contribution Amount for 2025

Employee contribution of Rs.50 per year: Each employee contributes a fixed amount annually toward welfare schemes under the Fund.
Employer contribution of Rs.100 per year: The employer contributes a higher amount as part of their statutory responsibility for employee welfare.
Total contribution of Rs.150 per employee per year: The combined contribution ensures sufficient funding for labour welfare initiatives.
Employer responsible for deduction: The employer must deduct the employee’s share from wages and maintain proper payroll records.
Employer responsible for remittance: The employer must deposit the entire amount both shares together within the prescribed timeline to ensure full compliance.

Mode of Payment

The notification clearly states that payment must be made online only.

The official payment portal is:

https://klwbapps.karnataka.gov.in

Offline payments are not permitted. Employers must ensure correct details while making payment, including establishment registration details and employee count.

Due Date for Payment

Last date for payment: 15 January 2026
Contribution year: Calendar Year 2025

Employers should not wait until the last date, as portal issues or errors may lead to delay and penalties.

Penalty for Late Payment

The notification imposes strict consequences on employers who fail to deposit the Labour Welfare Fund contribution within the prescribed due date. These penalties are intended to ensure timely compliance and discourage employers from delaying statutory payments. Late payment not only increases the financial burden but also exposes the establishment to regulatory and legal action.

Consequences of delayed payment include:

Interest for the first three months: If payment is delayed up to three months, interest is charged at 12% per annum on the outstanding amount, increasing the cost of compliance.
Higher interest after three months: When the delay exceeds three months, the interest rate rises to 18% per annum, making prolonged non-compliance significantly expensive.
Labour inspections: Labour Department officers may conduct inspections to verify employee records, wage registers, and compliance status.
Legal proceedings: Authorities are empowered to initiate legal action to recover unpaid contributions.
Recovery measures: Recovery proceedings may be initiated to collect dues from the employer.
Impact on other compliances: Continued non-compliance can result in stricter scrutiny during other labour law filings and future inspections.

Why Compliance Is Important

Paying the Labour Welfare Fund is not a procedural or optional requirement; it is a statutory obligation imposed by law. Compliance reflects an employer’s commitment to employee welfare and adherence to labour regulations. Ignoring or delaying this payment can create financial, legal, and operational complications for the business.

Failure to comply can lead to the following consequences:

Financial burden due to interest: Delayed payment attracts statutory interest, increasing the total amount payable and creating unnecessary financial strain.
Legal notices and departmental action: Non-payment may result in notices from the Labour Department and initiation of legal proceedings for recovery.
Issues during labour inspections: During inspections, non-compliance can lead to adverse observations, additional scrutiny, and follow-up actions.
Impact on business reputation: A record of labour law non-compliance can negatively affect the organisation’s credibility with authorities, auditors, and stakeholders.

Timely payment helps ensure smooth business operations, regulatory compliance, and peace of mind, while avoiding avoidable penalties and legal risks.

Practical Steps for Employers

To ensure smooth and timely compliance with the Labour Welfare Fund requirements, employers should follow a clear and systematic approach. Taking these steps in advance helps avoid errors, delays, and penalties.

Verify whether your establishment is covered: Employers should first check whether their establishment falls under the categories specified in the notification. This involves reviewing the nature of business, registration status, and employee strength to confirm applicability.
Finalise employee strength for 2025: Determine the total number of employees for the calendar year 2025 based on payroll and attendance records. Accurate employee count is essential for correct calculation of contribution.
Calculate total contribution: Once the employee strength is finalised, calculate the total payable amount by applying the prescribed contribution rate per employee. This ensures correct payment without shortfall or excess.
Visit the official KLWF portal: Access the official Karnataka Labour Welfare Board portal and log in using the establishment’s registration details to initiate the payment process.
Complete online payment before 15 January 2026: Make the payment well before the due date to avoid last-minute technical issues, delays, or interest liability.
Save payment receipt for records and audits: After payment, download and safely store the receipt as proof of compliance. This document may be required during audits, inspections, or future verification.

Conclusion

The Karnataka Labour Welfare Fund notification dated 05 December 2025 reinforces the importance of statutory compliance for employers. The contribution amount, due date, and penalties are clearly defined, leaving no room for ambiguity.

Employers should treat this obligation seriously and complete payment well before 15 January 2026 to avoid interest, inspections, and legal complications. Timely compliance supports employee welfare and ensures smooth business operations in Karnataka.

Karnataka Govt Issues KLWF Contribution Notice for 2025:

Frequently Asked Questions (FAQs)

Q1. Is Labour Welfare Fund payment compulsory in Karnataka?

Ans. Yes, payment of the Labour Welfare Fund is compulsory for eligible establishments in Karnataka under the Karnataka Labour Welfare Fund Act, 1965. Employers covered by the Act must comply annually to avoid penalties and legal consequences.

Q2. What is the total contribution per employee?

Ans. The total Labour Welfare Fund contribution is Rs.150 per employee per year, which includes both the employer’s and employee’s share. The combined amount must be deposited by the employer within the prescribed due date.

Q3. Who is responsible for paying the contribution?

Ans. The employer is responsible for deducting the employee’s share from wages and depositing the full Labour Welfare Fund contribution online with the Karnataka Labour Welfare Board on or before the due date.

Q4. Is online payment compulsory?

Ans. Yes, as per the latest notification, Labour Welfare Fund contributions in Karnataka must be paid only through the online payment mode. Offline payments are not permitted under the current compliance framework.

Q5. What is the last date for KLWF payment for 2025?

Ans. The due date for payment of Karnataka Labour Welfare Fund contribution for the year 2025 is 15 January 2026. Employers must ensure timely payment to avoid interest and penalties.

Q6. What happens if payment is delayed?

Ans. If the contribution is paid late, interest is charged at 12% for the first three months and 18% thereafter. Continued default may also attract penalties or legal action by authorities.

Q7. Are IT and BT companies covered?

Ans. Yes, IT and BT companies employing 50 or more employees are covered under the Karnataka Labour Welfare Fund Act and are required to pay the prescribed contribution within the specified timelines.

Q8. Do charitable trusts need to pay KLWF?

Ans. Yes, charitable trusts and registered organisations are required to pay Labour Welfare Fund contribution if they fall within the scope of the Act and meet the prescribed employee strength criteria.

Q9. Is contribution required for contract workers?

Ans. Yes, establishments engaging 20 or more contract workers are required to pay Labour Welfare Fund contribution for such workers, ensuring their welfare benefits under the Karnataka Labour Welfare Fund Act.

Q10. Where can employers get clarification?

Ans. Employers can seek clarification from the Karnataka Labour Welfare Board using official contact details provided in notifications or obtain professional compliance assistance for accurate guidance and timely compliance.