Kerala payroll: professional tax, LWF and state rules
Last reviewed: 24 Sep 2026 · Author: NeevHR team
Kerala professional tax is half-yearly and paid to the local body, with rates revised from 1 October 2024. Most shops and offices pay a monthly welfare fund of ₹50 each from employee and employer.
Professional Tax in Kerala
Professional tax in Kerala is levied by municipalities and panchayats under the Kerala Municipality Act, 1994 and the Kerala Panchayat Raj Act, 1994, for the half-years April to September and October to March. The employer deducts it and pays the local body where the establishment is located. The slab is based on half-yearly income.
Rates were revised from 1 October 2024 by G.O.(Rt) No. 1149/2024/LSGD. The top rate of ₹1,250 per half-year reaches the constitutional maximum of ₹2,500 a year. Payment is commonly due by 31 August and the end of February; confirm with your local body.
| Half-yearly income | PT per half-year |
|---|---|
| Up to ₹11,999 | Nil |
| ₹12,000 to ₹17,999 | ₹320 |
| ₹18,000 to ₹29,999 | ₹450 |
| ₹30,000 to ₹44,999 | ₹600 |
| ₹45,000 to ₹99,999 | ₹750 |
| ₹1,00,000 to ₹1,24,999 | ₹1,000 |
| ₹1,25,000 and above | ₹1,250 |
Labour Welfare Fund in Kerala
Kerala runs sector-specific welfare funds. For most shops, offices and IT or ITeS establishments outside factories, the Kerala Shops and Commercial Establishments Workers Welfare Fund Act, 2006 applies: ₹50 from the employee and ₹50 from the employer each month from 1 September 2022.
Factories, plantations and some other sectors fall under other funds, including the Kerala Labour Welfare Fund Act, 1975, whose current amounts should be confirmed with the Labour Commissionerate.
| Item | Detail |
|---|---|
| Shops and establishments fund | ₹50 employee, ₹50 employer, monthly |
| Other sectors | Sector-specific welfare boards |
Minimum wages in Kerala
Minimum wages are notified separately for more than 80 scheduled employments, with a dearness allowance linked to the consumer price index, and the list of employments is still growing. Check the Labour Commissionerate for your employment.
Shops and establishments and other considerations
- Kerala Shops and Commercial Establishments Act, 1960: the 2018 amendment allows women to work night shifts with safeguards and requires seating for staff.
- The Labour Commissionerate issues paid-holiday orders for elections, so holiday calendars should allow ad hoc paid holidays.
Running Kerala payroll in NeevHR
- The monthly shops and establishments welfare fund is supported as a fixed monthly contribution by work location.
- Holiday calendars accept ad hoc paid holidays, such as election holidays.
- Kerala's local-body, half-yearly PT has its own deduction months and income basis; your implementation team will confirm the set-up for your local body.