Professional Tax and Labour Welfare Fund: A State-Wise Guide for Employers
What Professional Tax and Labour Welfare Fund are, which states levy them, Maharashtra and Gujarat slabs, February adjustments, half-yearly LWF and how to handle multi-state payroll.
pagar karo Payroll Desk· Published 29 Sep 2026· Updated 28 Oct 2026· 3 min readProfessional Tax (PT) is a state tax on employment, deducted from salary by the employer, capped at ₹2,500 per person per year by the Constitution. Each state sets its own slabs — for example Gujarat charges ₹200 a month above ₹12,000, and Maharashtra charges up to ₹200 a month with ₹300 in February. Labour Welfare Fund (LWF) is a small state contribution, often half-yearly — ₹25 employee + ₹75 employer in Maharashtra and ₹6 + ₹12 in Gujarat, with the June and December salaries.
- PT follows the state where the employee works, not the head office.
- Annual PT can’t exceed ₹2,500 per person; some states use a higher February deduction to reach the annual amount.
- Not every state levies PT or LWF — check each work location.
- Maharashtra has separate slabs for women employees.
What Professional Tax is
Professional Tax is levied by state governments on people earning from employment, trades and professions. For salaried staff, the employer deducts it every month and deposits it with the state. Article 276 of the Constitution caps it at ₹2,500 per person per year.
Maharashtra PT slabs
| Monthly salary | Men | Women |
|---|---|---|
| Up to ₹7,500 | Nil | Nil |
| ₹7,501 – ₹10,000 | ₹175 | Nil |
| ₹10,001 – ₹25,000 | ₹200 (₹300 in February) | Nil |
| Above ₹25,000 | ₹200 (₹300 in February) | ₹200 (₹300 in February) |
The February top-up brings the yearly total to ₹2,500.
Gujarat PT slabs
| Monthly salary | PT |
|---|---|
| Up to ₹12,000 | Nil |
| Above ₹12,000 | ₹200 a month (₹2,400 a year) |
Other states
States such as Karnataka, West Bengal, Tamil Nadu, Telangana, Andhra Pradesh, Kerala, Madhya Pradesh, Odisha and Assam levy PT with their own slabs and due dates; Delhi, Haryana, Uttar Pradesh and Rajasthan do not levy it on salaries. Slabs change from time to time — keep a dated table per state instead of hard-coding amounts.
Labour Welfare Fund (LWF)
LWF funds welfare schemes for workers — housing, education, medical help. Contributions are small and the frequency varies by state.
| State | Employee | Employer | When |
|---|---|---|---|
| Maharashtra | ₹25 | ₹75 | June and December salaries |
| Gujarat | ₹6 | ₹12 | June and December salaries |
Managerial and supervisory staff above a notified wage are usually excluded — record this as a per-person flag.
Running payroll across states
- Assign every employee a work location with its state.
- Keep PT and LWF rules per state with effective dates.
- Register the establishment in each state that levies PT.
- Track monthly totals and due dates per state — they differ.
pagar karo picks PT and LWF from each employee’s work location, applies February adjustments and half-yearly LWF automatically, and lists amounts due per state on the Compliance page.
Frequently asked questions
Which states don’t have Professional Tax?
Several states and union territories, including Delhi, Haryana, Uttar Pradesh and Rajasthan, do not levy PT on salaries. Always check the current position for each work location.
Who pays Professional Tax — employer or employee?
The employee bears PT; the employer deducts it from salary and deposits it with the state, and must also register and file returns.
Is LWF deducted every month?
It depends on the state. Many states collect LWF half-yearly (June and December) or yearly. Maharashtra and Gujarat collect it with June and December salaries.
This guide is general information for employers in India, checked against the sources above on 28 Oct 2026. Rules and rates change — confirm with your CA or the official notification before acting.