PF wage ceiling raised to ₹25,000: what changes in payroll
Updated 21 October 2026
The EPF wage ceiling rose from ₹15,000 to ₹25,000 a month from 17 September 2026. The Ministry of Labour and Employment notified it by S.O. 5109(E), dated and published in the Gazette of India on 17 September 2026, under section 2(89) of the Code on Social Security, 2020; it replaces the ₹15,000 set by S.O. 2702(E) of 29 May 2026. The EPF Scheme 2026 and the Employees’ Pension Scheme 2026, which replaced the 1952 and 1995 schemes on 29 June 2026, apply whatever ceiling the government notifies, so no scheme paragraph had to change. It is the first change to the ceiling since September 2014, and it changes payroll for two groups of employees: those whose PF is restricted to the ceiling, and those earning between ₹15,001 and ₹25,000.
Who it affects
| Employee | Before 17 Sep 2026 | From 17 Sep 2026 |
|---|---|---|
| PF wages up to ₹15,000 | PF on full wages | No change |
| PF wages ₹15,001 to ₹25,000, PF on full wages | No change in PF; EPS capped at ₹15,000 | EPS now on full wages |
| PF wages above ₹15,000, PF restricted to the ceiling | PF on ₹15,000 | PF on wages up to ₹25,000 |
| PF wages above ₹25,000, PF on full wages | No change in total PF | EPS share rises, EPF share falls |
PF wages here are wages as the labour codes define them, not basic alone. A structure that keeps basic low and allowances high may have PF wages above what payroll is using today; see the 50% wage rule.
Excluded employees must now be enrolled. EPFO’s FAQs on the revision say that employees in service on 17 September 2026 who stayed out of PF as “excluded employees”, and whose PF wages are ₹25,000 or less, become members of EPF, EPS and EDLI from 17 September 2026, with contributions from that date. They do not have to apply: enrolling them is the employer’s duty. New joiners on wages up to ₹25,000 are enrolled from the day they join.
Worked example
An employee with PF wages of ₹22,000 a month, whose employer restricted PF to the ceiling:
| Monthly | Old ceiling (₹15,000) | New ceiling (₹25,000) |
|---|---|---|
| PF base | ₹15,000 | ₹22,000 |
| Employee PF at 12% | ₹1,800 | ₹2,640 |
| Employer EPS at 8.33% | ₹1,250 | ₹1,833 |
| Employer EPF (12% less EPS) | ₹550 | ₹807 |
| Employer total | ₹1,800 | ₹2,640 |
Take-home falls by ₹840 a month, and employer cost rises by the same amount. For an employee earning more than ₹25,000 with PF restricted to the ceiling, both shares rise from ₹1,800 to ₹3,000.
September 2026 is a split month
The old ceiling applies to 1 to 16 September and the new one to 17 to 30 September. For the employee above, September PF wages are 16/30 of ₹15,000 plus 14/30 of ₹22,000: ₹8,000 + ₹10,267 = ₹18,267, so employee PF is ₹2,192. This is the method in EPFO’s FAQs: one ECR for September, with 16/30 of the month’s wage under the ₹15,000 ceiling and 14/30 under ₹25,000. An employee who was excluded until 16 September shows only the second part, 14/30 of their wage.
EPFO moved the due date for filing the September 2026 ECR and paying its contributions from 15 October to 31 October 2026 (circular of 13 October 2026), for September only; October’s are due on 15 November as usual. A September payroll already finalised at the old ceiling needs a supplementary recovery in the next run; it cannot simply be re-run. EPFO’s FAQs allow the employee’s September share to be recovered from the next payroll, but the full ECR and payment are still due by 31 October.
EPS and EDLI
- EPS: the maximum pension contribution rises from ₹1,250 to ₹2,083 a month: 8.33% of ₹25,000 is ₹2,082.50, and contributions round to the nearest rupee. It comes out of the employer’s 12%, so at the ceiling the employer’s EPF share is ₹917. The Central Government’s 1.16% stays limited to wages of ₹15,000 (G.S.R. 890(E)).
- EPS for members who were left out of it: someone who joined after 1 September 2014 on wages above ₹15,000 was an EPF member but not an EPS member. If their wages on 17 September 2026 were ₹25,000 or less, they become EPS members from that date (new para 7(1)(iii) of the Employees’ Pension Scheme 2026, G.S.R. 847(E)).
- EDLI: the employer’s contribution of 0.5% is capped at ₹125 a month, on ₹25,000. The maximum EDLI benefit stays at ₹7 lakh for now.
What to do now
- List every employee whose PF is restricted to the ceiling, everyone with PF wages between ₹15,001 and ₹25,000, and every EPF member outside EPS.
- Enrol the excluded employees from 17 September 2026.
- File the September ECR with the split-month wages, and pay, by 31 October.
- Run October payroll at the new ceiling, and recover the September difference.
- Tell affected employees why take-home has changed before the payslip arrives.
Questions
From when does the ₹25,000 PF wage ceiling apply?
From 17 September 2026, the day S.O. 5109(E) was published in the Gazette. Wages for 1 to 16 September are still calculated at the old ₹15,000 ceiling, so September is a split month.
Is PF mandatory for a salary of ₹25,000?
Yes, if PF wages are ₹25,000 or less. Employees on those wages must be enrolled in EPF and EPS, including those who were "excluded employees" under the old ₹15,000 ceiling: they join from 17 September 2026. Above ₹25,000, membership is voluntary, with the employer's consent. The test is wages as the Code defines them, not gross pay.
Does PF go up for someone earning ₹40,000 basic?
Only if the employer restricts PF to the ceiling. Then the base moves from ₹15,000 to ₹25,000, and both shares rise from ₹1,800 to ₹3,000 a month. If PF already runs on full wages, nothing changes.
What is the maximum EPS contribution now?
8.33% of ₹25,000 is ₹2,082.50, and contributions round to the nearest rupee, so ₹2,083 a month, up from ₹1,250. The Central Government's 1.16% stays capped at wages of ₹15,000.