Payroll & statutory · Updated October 2026
The EPF wage ceiling is the monthly wage limit up to which provident fund membership is mandatory and contributions are normally calculated. It was Rs 15,000 from 2014 until the Government notified Rs 25,000 a month with effect from 17 September 2026 (S.O. 5109(E)), so any payroll template still using the old figure needs fixing.
PF is no longer worked out on “basic wages” alone. Since the Code on Social Security started on 21 November 2025, the EPF Scheme, 2026 takes 12% of “wages” as defined in the Code on Social Security: basic pay, dearness allowance and retaining allowance, with HRA, bonus, overtime, conveyance, commission and employer PF excluded. There is a catch. If those excluded payments add up to more than half of total remuneration, the excess is added back, which is the same 50% wage rule that hits gratuity and leave. A company that parked 30% of pay in basic to keep PF low should re-test every salary structure.
Contribution is 12% of PF wages for the employee. For anyone earning more than the ceiling, the default is to contribute on Rs 25,000 only, though employee and employer can jointly choose to contribute on the full wage. Your employer’s share is split between EPF and pension, as explained under PF contribution rate.
| PF wages | Basis used | Employee 12% |
|---|---|---|
| Rs 22,000 | Actual wages (below ceiling) | Rs 2,640 |
| Rs 40,000, capped | Rs 25,000 | Rs 3,000 |
| Rs 40,000, full-wage option | Rs 40,000 | Rs 4,800 |
The pension part of the employer share is limited to the ceiling, so at Rs 25,000 it tops out at about Rs 2,083 a month. Whether the EDLI wage cap and its Rs 7 lakh maximum benefit move in step is not clear from the notification alone, so wait for EPFO’s own guidance before telling staff their insurance cover has risen.
The notification took effect mid-month. As of late September, EPFO had not published a single method for that month, and advisers disagree: some split the month (old ceiling for 1 to 16 September, new from the 17th), others apply Rs 25,000 for the whole month for existing members. The September ECR is due by 15 October, so check EPFO’s latest circular or FAQ before you file.
Not if they were never members. They are “excluded employees”, though employer and employee can jointly opt in, and anyone already a member stays one. Check your UAN history for prior membership before treating a new joiner as excluded.
No. The rates stay where they were; only the wage on which they apply moves, so the maximum employee deduction goes from Rs 1,800 to Rs 3,000.
For those with PF wages between Rs 15,000 and Rs 25,000 who were contributing on the old capped amount, yes. Run an affected salary through the take-home salary calculator to see the difference.
Model any wage under the new ceiling in the PF Calculator, and confirm which components feed it with our guide to basic salary.