EPF wage ceiling is now ₹25,000: what employers need to change

The provident fund wage ceiling has gone up for the first time since 2014. From 17 September 2026, the ceiling is ₹25,000 a month, up from ₹15,000. The change was notified as S.O. 5109(E).

If you run payroll in India, three things change: who must be enrolled, how much is deducted, and what the company pays.

What the wage ceiling does

The ceiling is the monthly PF wage (basic pay plus dearness allowance) up to which provident fund is compulsory. Employees whose PF wages are at or below the ceiling must be enrolled. Contributions are 12% from the employee and 12% from the employer, worked out on wages up to the ceiling. Above it, contributing on the higher amount is optional for both sides.

So raising the ceiling does two things at once:

• More people are covered. Employees earning PF wages between ₹15,001 and ₹25,000 a month, who could previously be left out, now have to be enrolled.
• Contributions go up for anyone capped. If your company deducts PF on the ceiling rather than on full basic pay, the base rises from ₹15,000 to ₹25,000.

An example

Take an employee with basic pay of ₹30,000 a month, whose PF is worked out on the ceiling.

	Before 17 September	From 17 September
PF wage	₹15,000	₹25,000
Employee PF (12%)	₹1,800	₹3,000
Employer PF and pension (12%)	₹1,800	₹3,000

The employee’s take-home pay falls by ₹1,200 a month, and the same amount goes into their provident fund and pension. The employer pays ₹1,200 more, plus EDLI insurance (0.5%) and admin charges (0.5%) on the higher wage.

Companies that already deduct PF on full basic pay see no change for employees earning more than ₹25,000.

September 2026 is a split month

The new ceiling applies from 17 September, not from the start of the month. For September, the ₹15,000 ceiling covers 1 to 16 September and ₹25,000 covers 17 to 30 September. If your September payroll ran on the old ceiling, it needs a correction.

What to do now

1. Check enrolment. List everyone with PF wages between ₹15,001 and ₹25,000 who is not enrolled, and enrol them.
2. Update the payroll setting for the PF wage ceiling to ₹25,000, effective 17 September 2026.
3. Recalculate September for capped employees, and pay any difference with the next return.
4. Review CTC letters. If employer PF sits inside CTC, the in-hand figure for capped employees goes down. Tell people before payday, not after.
5. Re-run your cost budget. The extra employer PF, EDLI and admin charges add to headcount cost from October.

Do not forget the labour codes

Since 21 November 2025, PF is worked out on wages as defined in the labour codes. If allowances are more than half of an employee’s total pay, the excess counts as wages. A salary structure with a very low basic can raise PF more than the ceiling change alone.

You can see the effect on a single salary with the salary calculator, and read the full PF rules in the compliance guide.