The Employees’ Provident Fund Organisation (EPFO) has raised the statutory wage ceiling for mandatory EPF coverage from ₹15,000 to ₹25,000 per month, with the revised limit taking effect on September 17, 2026. October will be the first full salary month under the new ceiling.
The change could increase monthly PF deductions for employees whose contributions were previously capped at ₹15,000, while also bringing more workers into the formal social-security system.
How Much PF Will Be Deducted?
For an employee with ₹20,000 in applicable PF wages, the employee contribution from October will be 12%, or ₹2,400 per month.
The employer will also contribute ₹2,400. Of this, about ₹1,666 goes towards the Employees’ Pension Scheme (EPS) and ₹734 towards EPF, according to the EPFO illustration.
At the revised ₹25,000 ceiling, an employee’s 12% contribution would be ₹3,000 per month.
What Happens to Take-Home Salary?
Employees who were previously contributing only on the ₹15,000 ceiling may see their monthly take-home salary decline because of the higher employee contribution.
For example, an employee whose PF wages are ₹20,000 would move from an earlier ₹1,800 employee contribution to ₹2,400 — an increase of ₹600 per month.
However, the actual impact depends on the employee’s applicable PF wages and existing contribution arrangement. EPFO has clarified that PF wages are not necessarily the same as gross salary.
More Workers Enter EPFO Coverage
The government expects the higher ceiling to bring more than 51 lakh additional workers earning between ₹15,000 and ₹25,000 into mandatory EPFO coverage.
The revised framework also expands access to EPF, EPS pension and EDLI insurance benefits for eligible workers.
The wage ceiling had remained unchanged since September 2014. The latest revision therefore represents the first increase in 12 years.
September Was a Transition Month
Although the new ceiling took effect on September 17, September payroll requires a split calculation because the first 16 days were under the earlier ₹15,000 ceiling.
From October, the calculation becomes simpler because the entire month falls under the revised framework.
For employees, the immediate effect will depend mainly on their PF wage, existing EPF membership and how their employer structures contributions.
