Factories in the industrial areas around Sundar and Raiwind Road employ thousands of workers. Beyond salaries, EOBI and social security, qualifying companies and establishments face two further obligations that are often misunderstood or forgotten: the Workers' Welfare Fund (WWF) and the Workers' Profit Participation Fund (WPPF).
Workers' Welfare Fund (WWF)
WWF is a levy on qualifying industrial establishments, calculated on profit (or a specified base) above a threshold. Following constitutional changes, WWF for establishments operating within a province is generally governed by provincial law — in Punjab, the Punjab Workers' Welfare Fund framework — while trans-provincial entities have faced questions over which law applies. Contributions are payable annually, with returns and deadlines.
Workers' Profit Participation Fund (WPPF)
WPPF requires qualifying companies to allocate a percentage of profit to a fund for workers, distributed according to the law. It is administered under applicable federal or provincial companies' profits (workers' participation) legislation, with the fund managed by trustees and contributions made annually.
Who's covered
| Factor | Relevance |
|---|---|
| Company or industrial establishment | Applicability depends on entity type |
| Number of workers | Thresholds apply |
| Profit level | Contributions based on profit |
| Provincial vs trans-provincial | Determines which law applies |
Accounting and tax
WWF and WPPF are expenses in the company's accounts. Their deductibility for income tax and the timing of deductions follow tax rules. Contributions paid late can attract additional charges.
Distribution to workers
WPPF amounts distributed to workers are income for workers, subject to the rules.
Common problems
- Not realising the company is covered.
- Paying under the wrong law (federal vs provincial).
- Missing annual deadlines.
- Not keeping the WPPF trust properly.
Add WWF and WPPF to the annual close checklist alongside the corporate return. Most issues arise from simply forgetting them.
See factories' compliance calendar.
Board approval and audit
WWF and WPPF calculations should be reviewed by the auditors and approved with the annual accounts, so the figures in the accounts, the tax return and the fund returns agree.
Contract labour
Many factories use contractors to supply labour. Whether contract workers count towards thresholds and benefit from WPPF depends on the law and the arrangement. Keep contracts and the contractor's payroll records.
Records for inspectors
Labour departments and fund authorities inspect factories. Payroll, attendance and contribution records are what they examine.
Sundar — questions we get asked
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