For twelve years, the number was Rs 15,000. Payroll systems, salary structures and CTC models were all built around it. On 17 September 2026, it became Rs 25,000, and every establishment running PF now has a set of employees who were outside the scheme on Tuesday and inside it on Wednesday.
The statutory wage ceiling for EPF coverage rose from Rs 15,000 to Rs 25,000 with effect from 17 September 2026, notified as S.O. 5109(E) under Section 2(89) of the Code on Social Security, 2020. Employees earning between Rs 15,001 and Rs 25,000 who were previously excluded on wage grounds now come within mandatory coverage, and the capped employee contribution rises from Rs 1,800 to Rs 3,000 a month.
Need help working out who is newly covered? WhatsApp us your headcount and wage bands and we will map the impact.
Quick Summary — Before and After
| Item | Until 16 Sept 2026 | From 17 Sept 2026 |
| Wage ceiling | Rs 15,000 | Rs 25,000 |
| Employee share at the ceiling | Rs 1,800 | Rs 3,000 |
| EPS share at the ceiling (8.33%) | Rs 1,250 | Rs 2,083 |
| EDLI maximum | Rs 75 | Rs 125 |
| ESIC ceiling | Rs 21,000 | Rs 21,000, unchanged |
💡 TaxKitab Tip
The group that causes the most trouble is not the newly covered employees. It is the ones your records still describe as excluded employees purely because they earned above Rs 15,000. That classification no longer holds on its own, and it is usually sitting in a payroll master that nobody has revisited in years. Pull a list of everyone marked excluded, check the reason against the new ceiling, and fix the flag before you run the next ECR rather than after it is rejected. — From our TDS & TCS Book 6. Available at taxkitab.com/books (Rs 249)
What the Notification Actually Did
The Ministry of Labour and Employment issued Notification S.O. 5109(E) on 17 September 2026 under Section 2(89) of the Code on Social Security, 2020, notifying Rs 25,000 a month as the wage ceiling for the provident fund chapter of the Code. It supersedes the earlier notification of 29 May 2026 and took effect on the date of publication in the Official Gazette.
Two things follow. The ceiling applies from 17 September, which falls mid-month and mid-contribution-period. And it was made by notification rather than amendment, which is how the Code allows the ceiling to be revised.
Who Is Newly Covered
Employees whose statutory wages are Rs 25,000 or below, and who were treated as excluded only because they earned above Rs 15,000, now fall within mandatory coverage.
That last point matters more than it looks. An employee cannot continue to be treated as excluded simply because of the old threshold. Where the only ground for exclusion was the wage level, the exclusion ends.
Employees already in EPF stay in it, even where their wages now exceed Rs 25,000. Membership once acquired is not lost by crossing the ceiling.
What Each Contribution Becomes
At the ceiling, the employee share moves from Rs 1,800 to Rs 3,000 a month, and the employer share moves in step.
Within the employer’s 12%, the pension component is 8.33% of wages up to the ceiling — so the EPS contribution rises from Rs 1,250 to about Rs 2,083 a month. The EDLI maximum rises from Rs 75 to Rs 125.
Where you were already contributing on actual wages above Rs 15,000 rather than restricting to the ceiling, nothing changes for those employees. The revision affects establishments that capped at the old figure.
EPS Has Its Own Rule
Worth separating out, because it is where mistakes happen.
Pension contribution is now computed on wages up to Rs 25,000. But EPS membership for a new joiner is available only where wages at the time of joining are Rs 25,000 or below. Someone joining above that figure is EPF-only, with the whole employer share going to provident fund.
Members aged 58 and above continue as before, with no EPS contribution and the entire employer share going to EPF.
The September Complication
Because the change landed on 17 September, the month splits. The first sixteen days sit under the old ceiling and the remainder under the new one, and EPFO has issued operational guidance on handling the broken period.
Payroll systems that apply a single ceiling per month will not handle this without intervention. Where your software cannot pro-rate across two ceilings in one wage month, the September calculation needs a manual override before the ECR is generated, or the upload will fail validation.
What to Do Now
Identify everyone earning between Rs 15,001 and Rs 25,000 who was not previously an EPF member. Generate UANs for them, which currently run through face authentication on UMANG. Separately identify anyone with previous EPF membership, since they were never validly excluded.
Then review salary structures against the statutory definition of wages, recalculate employer cost, update the payroll and ECR configuration, and instruct contractors whose workers are affected. After the September payroll runs, reconcile contributions against the ECR rather than assuming the file went through cleanly.
Employers should also look at whether the additional cost qualifies for support under the employment-linked incentive scheme currently in operation.
Frequently Asked Questions
When did the Rs 25,000 ceiling take effect?
17 September 2026, the date Notification S.O. 5109(E) was published in the Official Gazette.
Does this change ESIC too?
No. The ESIC wage ceiling remains at the notified Rs 21,000, with Rs 25,000 for employees with disabilities. Only EPF changed.
We already contribute on full basic above Rs 15,000. Does anything change?
Not for those employees. The revision affects establishments that restricted contributions to the old ceiling.
An employee now earns above Rs 25,000. Do they leave the scheme?
No. An existing EPF member continues as a member regardless of later wage increases.
What happens to employees we marked as excluded?
Where the only ground for exclusion was wages above Rs 15,000, that ground no longer applies if their wages are Rs 25,000 or below. Review every excluded flag in your payroll master.
How do we handle September, when the change fell mid-month?
The month splits between the two ceilings. Follow EPFO’s operational instructions on the broken period, and check whether your payroll software can apply two ceilings within one wage month.
Does the employee take-home fall?
For newly covered employees and for those previously capped at Rs 15,000, yes — the deduction rises. The exact effect depends on their wages and how PF was previously calculated.
References
- Notification S.O. 5109(E) dated 17 September 2026, Ministry of Labour and Employment
- Code on Social Security, 2020 — Section 2(89), wage ceiling
- Notification S.O. 2702(E) dated 29 May 2026, superseded
- Employees Provident Funds Scheme, Employees Pension Scheme and EDLI Scheme
⚠️ Operational instructions on the broken wage period and ECR reporting continue to be issued by EPFO. Verify the current position against epfindia.gov.in or with your advisor before finalising September and October payroll.
Related Reading: Your First Payroll Run in India: What Usually Goes Wrong · Salary Structure Design: How to Split CTC Correctly · Reading an Indian Payslip: What Each Line Actually Means
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