EPFO Wage Ceiling Raised to ₹25,000: What Employers Should Review Now

In short: From 17 September 2026, the EPFO wage ceiling is ₹25,000 a month (Gazette notification S.O. 5109(E)). Contribution rates stay at 12% from the employee and 12% from the employer. Employees with PF wages up to ₹25,000 must be enrolled, and capped contributions are now worked out on PF wages up to ₹25,000. September 2026 is split at 17 September and filed in one ECR. October is the first full month at the new ceiling, and its PF is due by 15 November 2026.

Effective from 17 September 2026, the EPFO wage ceiling for mandatory coverage rises from ₹15,000 to ₹25,000 per month. The Union Cabinet approved the change on 16 September 2026. It is the first revision since September 2014.

For employers, this is a payroll change as much as a policy one. It affects who must be enrolled, how contributions are worked out for staff whose PF is currently capped, and what employees see on their payslips.

Key takeaways

The mandatory EPF wage ceiling moves from ₹15,000 to ₹25,000 per month.

Contribution rates do not change: 12% from the employee and 12% from the employer. With EDLI and administration charges, the employer’s total cost is about 13% of PF wages.

The ceiling applies to PF wages (basic pay, dearness allowance and retaining allowance), not gross salary or CTC.

The impact depends on how you calculate PF today, so two employers can see very different cost changes.

The ceiling is notified and applies from 17 September 2026. EPFO has since published FAQs on the revised ceiling. They confirm that September 2026 is split: wages for 1 to 16 September up to the ₹15,000 ceiling and wages from 17 September up to ₹25,000, in proportion to the days, in a single ECR.

Notification, Circular and FAQs: Where Things Stand

The change is notified. Gazette notification S.O. 5109(E), published on 17 September 2026 under section 2(89) of the Code on Social Security, 2020, sets ₹25,000 as the wage ceiling with effect from the date of publication. The Union Cabinet approved it a day earlier, on 16 September 2026. EPFO has since published FAQs on the revised ceiling, which explain who must be enrolled and how to file September 2026. Check epfindia.gov.in before each payroll run for any further circular.

What the EPFO Wage Ceiling Means

The wage ceiling is the monthly wage limit that decides whether EPF coverage is mandatory. It also caps statutory contributions. It is not a limit on gross salary or CTC.

For PF, “wages” broadly means basic pay, dearness allowance and retaining allowance. Under the Code on Social Security, 2020, if excluded allowances add up to more than half of total pay, the extra is added back to wages. Two employees with the same CTC can therefore have very different PF wages.

Which Employers and Employees Are Affected

The change applies to establishments covered under EPF. The general rule is that establishments with 20 or more employees must register. How much the change affects you depends on how you calculate PF today:

PF wages up to ₹15,000: no change.
Employees with PF wages between ₹15,001 and ₹25,000, including existing staff treated as excluded: EPFO’s FAQs say they must be made members of EPF, EPS and EDLI from 17 September 2026. The employer enrols them; no application is needed from the employee.
Existing members whose contributions are capped at ₹15,000: contributions are now worked out on their actual PF wages, up to ₹25,000.
Existing members outside the pension scheme: an employee already in EPF, earning between ₹15,000 and ₹25,000 but not an EPS member, may now have to be enrolled in EPS from 17 September 2026. EPFO’s official FAQs on the revised ceiling confirm this.
Employers already contributing on full PF wages: the 12% contribution stays the same, but more of the employer’s share goes to the pension scheme (EPS), and EDLI rises slightly.

EPFO’s FAQs say people already employed who were excluded because they joined above ₹15,000 must be enrolled from 17 September 2026 if their EPF wages are up to ₹25,000.

The government expects more than 51 lakh additional employees to be covered.

How Contributions and Take-Home Pay May Change

The contribution rates stay the same. The employee pays 12% of PF wages. The employer also pays 12%, and 8.33% of that goes to EPS, calculated on wages up to the ceiling. With EDLI (0.5%) and EPF administration charges (0.5%), the employer’s total cost is about 13% of PF wages.

Illustrative monthly figures per employee:

PF wages	How PF is calculated today	Employee PF before (12%)	Employee PF after (12%)	Take-home pay	Employer cost before (about 13%)	Employer cost after (about 13%)	Employer cost change
₹14,000	Actual wages	₹1,680	₹1,680	No change	₹1,820	₹1,820	No change
₹18,000	Capped at ₹15,000	₹1,800	₹2,160	₹360 less	₹1,950	₹2,340	₹390 more
₹30,000	Capped at ₹15,000	₹1,800	₹3,000	₹1,200 less	₹1,950	₹3,250	₹1,300 more
₹30,000	Full wages already	₹3,600	₹3,600	No change	₹3,825	₹3,875	₹50 more (EDLI only)

Employer cost = 12% PF + 0.5% EDLI (on wages up to the ceiling) + 0.5% administration charges. Administration charges have a minimum of ₹500 a month per establishment. Figures are illustrative.

Where the employee’s share goes up, take-home pay drops by the same amount, but that money goes into the employee’s own PF account. For EPS members on full wages, the total stays the same while more of the employer’s 12% moves to EPS: from ₹1,250 to about ₹2,082 a month. If your CTC already includes the employer’s PF, the employee may feel both increases in their net pay.

Sample Calculation: PF Wages of ₹37,500 a Month

Here is how the numbers work for an employee whose PF wages (basic pay plus DA) are ₹37,500 a month, where the employer contributes on the ceiling rather than on full wages.

Item	How it is worked out	Monthly amount
PF wages counted	Capped at the ₹25,000 ceiling	₹25,000
Employee PF	12% of ₹25,000	₹3,000
Employer share to EPS	8.33% of ₹25,000	₹2,082
Employer share to EPF	12% minus the EPS share	₹918
EDLI	0.5% of ₹25,000	₹125
EPF administration charges	0.5% of ₹25,000	₹125
Total employer cost		about ₹3,250

The employee’s take home pay falls by ₹3,000 a month for PF, compared with ₹1,800 under the old ₹15,000 ceiling. That money goes into the employee’s own PF account.

September 2026 for the same employee: EPFO’s FAQs split the month at 17 September. PF wages for September are ₹15,000 × 16/30 (₹8,000) plus ₹25,000 × 14/30 (₹11,667), which is ₹19,667. The employee share is 12% of that, about ₹2,360, filed in a single ECR.

Figures are illustrative. Check them against your own salary structure and EPFO guidance.

Salary Structures, CTC Budgets and Payroll Set-Up

Budgets: work out the extra employer cost by department and location before the next payroll run.
Salary structures: do not cut basic pay just to lower PF. The 50% wage rule limits how much that saves, and it can lead to disputes and scrutiny.
Payroll software: update the ceiling value, the EPS split logic and the contribution file formats.
Documentation: check offer letters, appointment letters and salary annexures that say PF is paid “on ₹15,000.”
Communication: tell affected employees about any change to their net pay before payday.

EPFO Wage Ceiling: Employer Action Checklist

Confirm your effective date against Gazette notification S.O. 5109(E) of 17 September 2026, and file September on EPFO’s split method: up to ₹15,000 for 1 to 16 September and up to ₹25,000 from 17 September, in a single return. If September was filed differently, check whether a correction is needed.
List every employee with PF wages above ₹15,000, including anyone currently marked as excluded.
Group them by how their contributions are calculated today.
Work out the change in employer cost and employee net pay for the September and October payrolls.
Update the payroll master data, the EPS logic and the return files.
Update CTC offer templates and salary annexures.
Brief managers and send a clear note to affected employees.
Keep a record of each decision you make.

For the wider picture on PF obligations, see our guide to Provident Fund compliance.

October 2026 Payroll: Checklist Before 15 November

October is the first full month at the new ceiling. Its PF is due by 15 November 2026.

Enrol every employee with PF wages up to ₹25,000 in EPF, EPS and EDLI, including anyone previously marked as excluded.
Confirm your payroll software uses ₹25,000 as the ceiling and the right EPS split.
If September was filed as a full month at either ceiling, check with your adviser whether a correction is needed.
Tell affected employees about the change in net pay before payday.

If you are weighing outside help, see how to choose a third party payroll partner, or explore TMS payroll outsourcing.

Plan the Change With TMS

Changes to the PF wage ceiling touch budgets, payslips and filings in the same month. TMS has handled payroll and statutory compliance for Indian employers since 2006. Our team can help you:

Assess the impact: identify affected employees and model the change in employer cost and take-home pay.
Restructure salaries: adjust salary components where the wage rules allow it.
Revise documentation: update offer letters, appointment letters and salary annexures.
Update payroll: reconfigure PF calculations, EPS logic and return files in your payroll process.
Stay compliant: keep your filings in line with requirements as EPFO issues guidance.

Ready to review your payroll before the next cycle? Share a few details in the contact form at the end of this page and our team will get in touch.

Talk to a TMS payroll compliance expert

Get a clear view of what the new EPFO wage ceiling means for your payroll.

Book Your Call

Or contact us on +91-22-4896-7640

Frequently Asked Questions

When does the revised EPFO wage ceiling take effect?

It applies from 17 September 2026, the date Gazette notification S.O. 5109(E) was published under the Code on Social Security, 2020. The Cabinet approved the change on 16 September 2026. Contributions for wages from 17 September must be worked out on the new ceiling. For September 2026, EPFO’s FAQs say the month is split at 17 September and filed in a single ECR. The date has not been postponed to 1 October.

Does the ₹25,000 EPFO wage ceiling apply to gross salary or CTC?

No. It applies to PF wages, which broadly means basic pay, dearness allowance and retaining allowance. Under the Code on Social Security, 2020, excluded allowances above half of total pay are added back to wages.

Will employer PF contributions go up for every employee?

No. Nothing changes for employees with PF wages up to ₹15,000. Where the employer already contributes on full PF wages, the 12% contribution stays the same, and only EDLI rises slightly (up to about ₹50 a month per employee). The increase mainly affects employees whose contributions are capped at ₹15,000, and new joiners with PF wages between ₹15,001 and ₹25,000.

Have the EPF contribution rates changed?

No. The employee and employer each still contribute 12% of PF wages. For pension scheme (EPS) members, 8.33% of the employer share goes to EPS, calculated on wages up to the ceiling. Including EDLI and administration charges, the employer’s total cost is about 13% of PF wages.

How many employees will the change bring under EPFO?

The government expects more than 51 lakh additional employees to come under mandatory EPFO coverage.

Has EPFO issued a circular on the ₹25,000 wage ceiling?

The ceiling itself is set by Gazette notification S.O. 5109(E) of 17 September 2026. EPFO has published FAQs on the revised ceiling, which explain enrolment and how to file September 2026. Check epfindia.gov.in for any further circulars before each payroll run.

How do I calculate PF on a salary above ₹25,000?

Work out PF wages (basic pay plus DA). If they are above ₹25,000 and you contribute on the ceiling, both shares are 12% of ₹25,000, which is ₹3,000 each. For example, at PF wages of ₹37,500, the employee pays ₹3,000 and the employer’s total cost is about ₹3,250 with EDLI and administration charges.

This article is general information based on gazette notification S.O. 5109(E) and EPFO’s FAQs on the revised ceiling, as of 17 October 2026. It is not legal advice.

Sources

EPFO, Frequently Asked Questions on the revision of the statutory wage ceiling (September 2026), published on epfo.gov.in
Gazette notification S.O. 5109(E), 17 September 2026, Ministry of Labour and Employment
Cabinet decision, PIB Release ID 2310812, 16 September 2026 (official text via PM India)
Business Standard
Ministry of Labour and Employment statement on the 17 September start (PTI via Daily Excelsior)
Economic Times, Mumbai print edition, 17 September 2026

EOR Employee Relocation in India: The Compliance Checklist Foreign Employers Miss

Employee relocation in India looks like a simple HR update when you read it from head office. It is not. Here is what actually has to move when a worker on an EOR payroll changes city.

The short version. An employee relocation in India is not just an address change. When a worker on an EOR payroll moves city, four things need a check. Start with the address proof. Next come the state level registrations. Then the ESIC dispensary mapping. Finally, the records your payroll provider holds. Provident fund usually needs nothing, because it follows the UAN. Professional tax and labour welfare fund are state levies, so a move across a state line can change what you deduct. If the person is a foreign national, immigration rules apply too, and they sit outside labour law.

Why employee relocation in India is a bigger deal than it looks

In a one law country, a staff move is an HR address update. However, India is not that country. Labour law is split between the centre and the states, so one move can touch a stack of separate registers.

As a result, a foreign employer rarely sees this. The monthly invoice looks the same before and after. Under it, your provider may be re-filing, re-checking and re-mapping.

Skip that work and nothing breaks on day one. It breaks later. For example, a worker turns up at a dispensary in the city they left. A state levy never gets switched over. A background check stalls because nobody proved the new address.

What changes in an employee relocation in India

1. Provident fund: portable, and usually no action

PF is a central scheme. The Universal Account Number stays with the worker. Where the employer does not change, money keeps flowing to the same account, whatever city they sit in.

One caveat is worth knowing. EPFO issues PF codes by region, and some employers hold more than one. If the move puts the worker on a different code, you have to shift the member account across. That is true even though the employer never changed. So ask your provider one question. Do you run on a single PF code, or several?

2. Professional tax: a state levy, so state lines matter

States levy professional tax, not the centre. Rates and slabs differ. Some states charge it. Some do not. At least one uses a different name for the same thing.

Move a worker across town in one state and nothing changes. Move them across a state line and you should review it. The deduction may change, and you need the right state registration to pay it over.

3. Labour welfare fund: also a state levy

Same logic applies here. Similarly, only some states run an LWF. Where one exists, the rate and the timing differ.

It is a small sum. It is also easy to miss, and a missed payment still shows up in an audit.

4. ESIC: the dispensary mapping matters more than the money

ESIC covers workers under a wage limit. However, the rate does not change when they move. What changes is the dispensary, the local clinic mapped to them, and the branch office.

Miss that step and the worker holds a card pointing at a dispensary in the old city. They find out at the worst moment, which is the day they need care.

5. Shops and establishments: tied to the desk, not the person

Sometimes a relocation also means a new work address. That might be a rented desk, a co-working seat, or a home used as the registered address.

In each case, the registration for that site is what matters. The individual record is not the issue.

6. Address and background checks: usually need redoing

Foreign employers often treat vetting as a one time job at hire. It is not.

Most vetting confirms where the person actually lives. Therefore, change the address and the check goes stale.

What you need next depends on your own rules and your sector. You may need a fresh physical address check. A police check may follow, where the role or your policy calls for one. Either way, new papers go on file.

In banking, pharma and other regulated fields, the client sets the bar, not Indian law.

7. Foreign nationals: immigration runs on its own track

Sometimes the person moving is a foreign national. Then a second track opens up. It runs on the Foreigners Act and the rules under it, not on labour law.

Two duties come up most. First, a foreign national registered with the FRRO or FRO has to report a change of home address. Second, whoever provides the housing files the arrival report, known as Form C. That could be a hotel, a serviced flat or a landlord.

Note where that second duty sits. It falls on the housing provider, not on you. That is exactly why firms miss it when they arrange a flat for someone they moved.

Neither duty fires when payroll updates. Neither happens on its own.

What an employee relocation in India looked like in practice

A Swiss recruitment firm hired technical staff in India through an EOR. It set up no Indian entity.

Part way in, one of those workers moved from Ludhiana to Amritsar. On paper it was a short hop inside one state.

In practice it meant more work. Someone had to run the physical check again at the new address. The police formalities needed closing out. And the C-Form papers needed handling. All of that ran alongside the onboarding, payroll and compliance work already in flight.

Meanwhile, the client managed none of it. From their desk, the person kept working and the invoice kept arriving in the same shape. The engagement recorded the outcome plainly. Compliant payroll, with local checks fully managed.

The point is not that the move was hard. The point is that a move which looks trivial from Zurich leaves a paper trail in India, and somebody has to own it.

Your employee relocation in India checklist

Run this list for every employee relocation in India, before the first day at the new site rather than after.

Get the new home address in writing, with proof.
Check whether the move crosses a state line. If it does, flag professional tax and LWF.
Update the ESIC dispensary and branch office mapping, if the worker is covered.
Confirm PF needs no action. Write down that you checked.
Order a fresh address check. Add a police check if the role or your policy needs one.
Update the staff record, the filing address and the insurance nominee.
If a new work site is involved, confirm the registration that covers it.
If the worker is a foreign national, run the immigration track in parallel.
Log the date you closed each step. An audit two years out will ask.

Three questions to ask your EOR provider

Most EOR contracts spell out onboarding and monthly payroll. Far fewer spell out what happens when life changes mid contract.

So ask three things about employee relocation in India before you sign. Who pays for a fresh check when a worker moves? How fast do you update the state registrations after a move across a border? Is relocation support inside the monthly fee, or billed on top?

In short, a vague answer is itself an answer.

How TMS handles employee relocation in India

TMS has run as an Indian HR and compliance firm since 2006. Around 8,500 people sit on TMS payroll across all 28 states, for clients in more than 20 countries.

When a worker on TMS payroll moves, TMS runs the checks, the state re-filings and the papers. That is what happened in the Swiss engagement above. The TMS compliance team checks every statutory position against current central and state notifications.

Pricing for relocation support sits in the individual engagement, so raise it when you scope the work.

Hiring in India without an entity of your own? Get a tailored quote.

More TMS guides

Deeper reference material on the topics in this post:

Employer of Record guides Statutory compliance guides Payroll outsourcing guides Contract staffing guides Government scheme guides All HR guides Complete index of guides

Tag: Provident Fund