For 12 years, PF was compulsory only for employees earning up to ₹15,000 a month. From 17 September 2026 that limit is ₹25,000. If you employ people earning between ₹15,000 and ₹25,000, your PF bill, your payroll and your September return have all changed. Here is exactly what to do, in plain language.
The short version
- The PF wage ceiling rose from ₹15,000 to ₹25,000 a month on 17 September 2026 (notification S.O. 5109(E)).
- Staff with PF wages between ₹15,001 and ₹25,000 must now be enrolled in EPF, EPS and EDLI. You enrol them; they do not need to apply.
- Contribution rates have not changed. Only the wage they apply to has gone up, so the rupee amounts are higher.
- September 2026 is a split month: 1–16 Sept at the old ceiling, 17–30 Sept at the new one, in a single return due 15 October 2026.
The change in numbers
Figures from the Union Cabinet decision of 16 September 2026, as reported by Upstox and Moneylife.
What happened, and when
- September 2014PF ceiling set at ₹15,000 a month (up from ₹6,500).
- 16 September 2026Union Cabinet approves raising the ceiling to ₹25,000.
- 17 September 2026Gazette notification S.O. 5109(E) published under the Code on Social Security, 2020. The new ceiling applies from this date.
- Late September 2026EPFO publishes FAQs explaining the split-month calculation and the September return.
- 15 October 2026 DEADLINESingle September ECR due, with full contributions under both ceilings.
Who is affected?
The test is the employee’s PF wages as defined in the Code on Social Security (broadly basic pay plus dearness allowance, with allowances above 50% of pay added back), not their gross salary or CTC. Find your employees in one of these four groups:
Not in PF, PF wages ₹15,001–₹25,000
Now compulsorily covered. Enrol them in EPF, EPS and EDLI from 17 September 2026.
Action neededIn PF, but contributions capped at ₹15,000
Contributions now go on actual PF wages up to ₹25,000, so the amounts rise.
Action neededIn EPF, but not in the pension scheme (EPS)
If PF wages are up to ₹25,000, they now join EPS. 8.33% of your share moves to their pension.
Action neededPF wages above ₹25,000
Not newly covered. Members already contributing on higher wages can continue as before.
Usually no changeHow much more will it cost?
The rates are the same as before: 12% from the employee and 12% from you (8.33% to pension, 3.67% to PF), plus 0.5% EDLI and 0.5% admin charges. What changes is the wage they apply to.
Your monthly cost per employee
Employer share (12%) + EDLI (0.5%) + admin (0.5%) = 13% of PF wages
For an employee on ₹25,000 PF wages who was capped at ₹15,000, your cost rises by ₹1,300 a month, or ₹15,600 a year.
| Monthly PF wages | Employee EPF (12%) | Employer EPS (8.33%) | Employer EPF (3.67%) | EDLI | Admin |
|---|---|---|---|---|---|
| ₹15,000 (old ceiling) | ₹1,800 | ₹1,250 | ₹550 | ₹75 | ₹75 |
| ₹20,000 | ₹2,400 | ₹1,666 | ₹734 | ₹100 | ₹100 |
| ₹25,000 (new ceiling) | ₹3,000 | ₹2,083 | ₹917 | ₹125 | ₹125 |
Based on the EPFO FAQ examples. The admin charge has a minimum of ₹500 a month per establishment.
Estimate for a regular month from October 2026, for an employee who was already a PF member capped at ₹15,000. Rounded to the nearest rupee.
September 2026 is a split month
Because the change started on the 17th, September is calculated in two parts, each on a 30-day basis, and reported in one return:
Here is how it works for an employee with PF wages of ₹20,000, in the three common situations:
| September 2026 | Newly covered | In EPF, now joins EPS | Was capped at ₹15,000 |
|---|---|---|---|
| Employee EPF (12%) | ₹1,120.00 | ₹2,400.00 | ₹2,080.00 |
| Employer EPF (3.67%) | ₹342.53 | ₹1,622.53 | ₹636.13 |
| Employer EPS (8.33%) | ₹777.47 | ₹777.47 | ₹1,443.87 |
| EDLI (0.5%) | ₹46.67 | ₹100.00 | ₹86.67 |
| Admin (0.5%) | ₹46.67 | ₹100.00 | ₹86.67 |
| Total to remit | ₹2,333.34 | ₹5,000.00 | ₹4,333.34 |
Worked example from the EPFO FAQs, as summarised by CAclubindia.
What it means for your employees
Take-home pay goes down a little, savings go up a lot. An employee on ₹20,000 PF wages who was capped at ₹15,000 will see their PF deduction rise from ₹1,800 to ₹2,400 a month. In return, your matching contribution rises by the same amount, and more of it goes into their pension.
What has not changed
- Contribution rates: 12% employee, 12% employer, 0.5% EDLI, 0.5% admin.
- MSMEs pay the same rates as larger businesses.
- The government’s 1.16% pension support is still on wages up to ₹15,000 (maximum ₹174 a month).
- The maximum EDLI life cover is still ₹7 lakh.
- Existing pensions do not go up automatically.
Your 7-step checklist for the new PF ceiling
- List affected employeesEveryone with PF wages up to ₹25,000 who is outside PF, capped at ₹15,000, or outside EPS.
- Check what counts as wagesUse the Code on Social Security definition. If allowances are more than half of pay, the excess counts as wages.
- Enrol new membersRegister them in EPF, EPS and EDLI from 17 September 2026 and generate UANs where needed.
- Calculate September in two parts1–16 September at ₹15,000, 17–30 September at ₹25,000, each on a 30-day basis.
- File one ECR and pay in fullOne September return with both periods, paid by 15 October 2026 to avoid interest and damages.
- Update payroll from OctoberApply the new ceiling every month and recover any missed September employee share.
- Keep records and check contractorsSave your workings for audits. If you use contract labour, ask contractors for their September ECR before releasing payments.
Common mistakes to avoid
- Using gross salary or CTC instead of PF wages to decide who is covered.
- Applying ₹25,000 to the whole of September instead of splitting the month.
- Waiting for employees to ask to join. Enrolment is the employer’s job.
- Reducing contributions for staff who already contribute on wages above ₹25,000.
Frequently asked questions
When does the ₹25,000 PF ceiling apply from?
From 17 September 2026, the date the notification was published. It is not postponed to 1 October.
My employee earns ₹40,000 gross. Are they covered now?
It depends on their PF wages, not their gross pay. For example, someone on ₹50,000 gross with PF wages of ₹25,000 is covered; someone with PF wages of ₹30,000 is not compulsorily covered.
Do employees need to apply to join PF?
No. The employer must enrol eligible employees, including in the pension scheme (EPS).
Do small businesses pay a lower rate?
No. MSMEs pay the same contribution rates as other establishments.
What if I miss the 15 October deadline?
Late payment attracts interest and damages on top of the contribution. If you are running late, file and pay as soon as possible to keep the extra cost low.
Not sure your September PF is right?
We’ll check your employee list, work out the new PF amounts, correct any September errors and keep your monthly returns on time. Or take our free 15-minute compliance check.
Sources
- Upstox: EPFO wage ceiling hiked to ₹25,000; gazette notification issued
- KPMG GMS Flash Alert 2026-249: wage ceiling raised (28 Sept 2026)
- KPMG GMS Flash Alert 2026-253: EPFO FAQs (2 Oct 2026)
- CAclubindia: EPF wage ceiling increased to ₹25,000, new rules
- Moneylife: 51 lakh more workers to come under social security
This article is general information based on central government rules and published EPFO guidance as of 11 October 2026. It is not legal advice. EPFO may issue further instructions, so check the latest circulars or talk to us before acting.
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