PF Wage Ceiling Is Now ₹25,000: What Employers Must Change
· 4 min read
On 17 September 2026 the government raised the EPF wage ceiling from ₹15,000 to ₹25,000 a month. It is the first change to the ceiling since 2014, and it reaches into almost every payroll in India: anyone paying staff between ₹15,000 and ₹25,000 in PF wages has new employees in PF, and anyone restricting PF to the ceiling is now deducting more.
This post covers what changed, who it affects, and the payroll settings to check this month. For the wider picture of PF, ESI, professional tax and TDS, see our HR and payroll guide.
What changed
| Before 17 Sep 2026 | From 17 Sep 2026 | |
|---|---|---|
| PF wage ceiling | ₹15,000 | ₹25,000 |
| Employee PF at the ceiling (12%) | ₹1,800 | ₹3,000 |
| Employer EPS at the ceiling (8.33%) | ₹1,250 | ₹2,083 |
| Employer EPF at the ceiling (3.67%) | ₹550 | ₹917 |
| EDLI at the ceiling (0.5%) | ₹75 | ₹125 |
The rates themselves did not change. The employee still pays 12% of PF wages, the employer still pays 12%, and the employer's share is still split 8.33% to the pension scheme and the rest to the employee's EPF account. What moved is the wage on which those percentages are capped.
Two things stayed where they were. The government's own 1.16% contribution to EPS is still calculated on wages up to ₹15,000, and the maximum EDLI insurance benefit stays at ₹7 lakh.
Who is affected
Staff earning ₹15,001 to ₹25,000 in PF wages. Until now they were outside compulsory PF unless they had joined earlier or voluntarily. From 17 September 2026 they are covered, so they need a UAN, a PF deduction on the payslip and an employer contribution in the monthly return.
Staff above ₹15,000 whose PF you restricted to the ceiling. If your payroll caps PF at the ceiling, the cap is now ₹25,000. An employee on ₹20,000 basic who had ₹1,800 deducted now has ₹2,400 deducted, and their take-home falls by ₹600 unless you restructure pay.
Staff above ₹25,000. Nothing changes compulsorily. They can still join voluntarily with your consent, and anyone already contributing on full wages carries on as before.
Pension membership. EPS is open to employees whose wages were within the ceiling when they joined, or on the date the new ceiling came into force. Someone on ₹22,000 who was in EPF only can now be in EPS too, which moves part of your 12% from their EPF account to the pension fund.
The PF wage is not just "basic"
PF is calculated on "wages" as the Code on Social Security defines them: broadly basic pay, dearness allowance and retaining allowance. If your salary structures keep basic low and pay most of the salary as allowances, check the wage definition rather than assuming basic is the PF wage. Our guide covers the 50% wage rule that limits how far allowances can go.
What to change in payroll this month
- Update the ceiling in your payroll settings from ₹15,000 to ₹25,000. If your software hard-codes it, ask your vendor when the update ships.
- List everyone between ₹15,000 and ₹25,000 who is not in PF. Generate UANs, collect KYC, and add them to the next return.
- Recheck EPS membership for employees who were EPF-only because their wages were above ₹15,000 when they joined.
- Recalculate September. The month is split: 1 to 16 September on ₹15,000, 17 to 30 September on ₹25,000. If September was already paid on the old ceiling, correct it before the next return.
- Tell your team. Take-home falls for people whose deduction rises. A short note explaining that the money goes into their own PF account saves a lot of payday questions.
- Budget for the employer side. Your 12% rises with theirs, and so do EDLI and admin charges.
Work out one employee
Our free PF and ESI calculator uses the new ceiling. Enter PF wages and gross wages to see the employee deduction, the EPS and EPF split, EDLI, admin charges and ESI for the month.
How Novota HR & Payroll handles it
Novota HR & Payroll takes attendance from a selfie punch-in, plans shifts on a roster, and runs payroll for the whole team with statutory deductions on every payslip. If you are moving from a spreadsheet, the first month is free.
Frequently asked questions
What is the new PF wage ceiling?
₹25,000 a month, with effect from 17 September 2026 (notification S.O. 5109(E)). It was ₹15,000. The ceiling applies to EPF, the pension scheme (EPS) and EDLI.
Do employees earning between ₹15,000 and ₹25,000 now have to join PF?
Yes. Employees whose PF wages are ₹25,000 a month or less are now covered compulsorily in an establishment that is covered under the EPF scheme. Before 17 September 2026 the line was ₹15,000.
What is the maximum EPS contribution now?
8.33% of wages up to ₹25,000, which is ₹2,083 a month, for an employee who is in the pension scheme. It was ₹1,250 on the old ₹15,000 ceiling. The government's own 1.16% EPS share stays on wages up to ₹15,000.
Do I have to raise PF for employees already contributing on full salary?
No. If an employee already contributes on wages above the ceiling, that arrangement continues. Employers who restrict PF to the ceiling now restrict it to ₹25,000 instead of ₹15,000.
How is September 2026 handled?
The month is split: 1 to 16 September on the old ₹15,000 ceiling and 17 to 30 September on ₹25,000. The September return, due on 15 October 2026, was the first to reflect the change.