Payroll in Karnataka
Professional tax, labour welfare fund and minimum wage for employers in Karnataka. These are the figures Flowy's payroll uses: when an employee's work location is in Karnataka, these rules apply to them without anyone configuring them.
Professional tax
Deducted from salary each month, on the employee's monthly gross.
| Monthly gross salary | Professional tax a month |
|---|---|
| Up to ₹24,999 | Nil |
| Above ₹24,999 | ₹200 (₹300 in February) |
No employee pays more than ₹2,500 in a year across all months.
Source: Karnataka Tax on Professions, Trades, Callings and Employments Act 1976, as amended in 2023, and the Amendment Act 2025 (February ₹300 from 1 April 2025).
Labour welfare fund
Due in December, from both the employee and the employer.
| Monthly wage | Employee | Employer |
|---|---|---|
| Any wage | ₹50 | ₹100 |
Source: Karnataka Act 05 of 2025, in force 10 January 2025.
Minimum wage
Monthly minimum wages including variable dearness allowance, effective 2026-04-01, for Bengaluru urban. Rates are notified per scheduled employment and zone; other zones are lower.
| Employment | unskilled | semi-skilled | skilled | highly-skilled |
|---|---|---|---|---|
| shops and commercial establishments | ₹17,000 | ₹18,700 | ₹20,570 | ₹22,630 |
| engineering industry | ₹17,850 | ₹19,635 | ₹21,600 | ₹23,760 |
| information technology | ₹18,000 | ₹19,800 | ₹21,780 | ₹23,960 |
Source: Karnataka Labour Department minimum wage notification.
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State rules are half of it. The other half is whether PF and gratuity are calculated on the wages the codes define.
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What is the professional tax rate in Karnataka?
It depends on the employee's monthly gross salary: nil up to ₹24,999; ₹200 a month from ₹25,000 (₹300 in February). No employee pays more than ₹2,500 in a year.
Who pays professional tax in Karnataka?
Employees whose monthly gross salary is ₹25,000 or more. The employer deducts it from salary and pays it to the state. The state's Act exempts some groups of employees, so check those against your staff.
Why is professional tax ₹300 in February in Karnataka?
The amount is ₹200 a month, and ₹300 in February, so the year comes to ₹2,500. The Constitution caps professional tax at ₹2,500 a year.
How much labour welfare fund is deducted from salary in Karnataka?
₹50 from the employee and ₹100 from the employer, in December.
Running payroll in more than one state?
Book a 10-minute Health Check. Bring three salary grades, anonymised, and the states you pay in.