INDIA PAYROLL: LWF Contribution for IT/ITES Sector in Kerala

A new enhancement in the Labour Welfare Fund (LWF) module enables organizations to configure LWF contributions as per the Kerala IT & IT-Enabled Employees and Entrepreneurs Welfare Scheme (IT Act)—ensuring accurate statutory compliance without manual intervention.

What’s New

• Introduced a new configuration option: “Applicable under IT Act (Kerala)”
• When enabled:
  • Applies a fixed LWF contribution of ₹100 (employee) + ₹100 (employer)
  • Replaces the default slab-based calculation
• Automatically applies to all employees mapped to Kerala location

How It Works

• Navigate to: Payroll → Settings → Paygroup → Configure → Filing Details → LWF
• Select Kerala as the state
• Enable “Applicable under IT Act (Kerala)”
• Save the configuration
  
  

Once enabled:

• Contribution values are auto-filled and locked (₹100 each)
• LWF is calculated consistently during payroll processing

Key Highlights

• Ensures statutory compliance for IT/ITES organizations in Kerala
• Eliminates the need for manual overrides every payroll cycle
• Contributions are reflected across:
  • Payslips
  • Payroll reports
  • Statutory filings & LWF remittances
• Automatically classified as statutory (non-taxable) deductions
• Switching back to standard configuration restores slab-based calculations

Why This Matters

Addresses a critical compliance gap where IT/ITES organizations in Kerala were required to follow a fixed LWF contribution, unlike the standard slab-based model. This update reduces operational effort, minimizes errors, and helps avoid compliance risks and penalties.

READ MORE