There is a Segula to read the Pitum HaKetoret off of parchment, and Rabbi Haim Palagi (Kaf HaHaim 17:18) says that it is propitious for prosperity. These parchments have become popular in recent times and they are usually framed on the wall of the synagogue or are leather-bound for individual use. Nevertheless, the Gemara (Gittin 60a) explains that unless done so in its entirety, the Torah should not be written down. Additionally, the Shulhan Aruch (Yore De’a 283:3) rules that it is not permitted to write down more than three verses of Torah, unless the whole Torah will be transcribed. In extenuating circumstances the principle of “Et La’asot L’Hashem, Heferu Toratecha” is applied. In other words, when there is a great need, Hashem’s laws can be temporarily abrogated for the greater good of the community. Rabbi Ovadia Yosef (Shu”t Yabia Omer, vol. 9, Yore De’a § 23) questions the practice in light of the Gemara’s dictate, and says that a scribe should not write the Pitum HaKetoret on parchment as it contains Torah verses. (However, if it is already written, it may be used).
To reconcile this apparent contradiction, Rabbi Avraham HaLevi (Ginat Veradim, Klal 2, § 27) explains that there are several examples of more than three Torah verses being written down, such as on the Parochet, on the Ketuba etc. and that the custom is to be lenient. The source of this leniency is the Rif, who says that if writing the verses is for the purpose of learning, then it is permitted. Reading the Pitum HaKetoret has a positive purpose and, even though the Shulhan Aruch follows the Rambam’s stricter position, the common practice to follow the Rif’s leniency.
Summary: There is a Halachic basis to the leniency of allowing the Pitum HaKetoret to be written on parchment.