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.

Free PDF

Get the PF and ESIC Employer Checklist 2026-27

Who to cover, monthly deadlines, joiner and exit steps
Updated for the ₹25,000 PF ceiling and the new 2026 rules
2-page PDF with tick boxes, checked on official sources

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.

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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. EPFO has extended the due date for the September 2026 ECR and PF payment from 15 October to 31 October 2026 (circular dated 13 October 2026); this applies to September only, and October 2026 is still due by 15 November.

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

Labour Code State Rules: What Employers Must Check in 2026

India’s four Labour Codes are in force, and the Central Rules landed in May 2026. However, the day-to-day detail sits with the states. So labour code state rules now decide much of what your HR team must actually do. This guide explains what the centre has settled, what your state still controls, and how to check your own position.

Key takeaways

The four Labour Codes took effect on 21 November 2025, and the Central Rules were notified on 8 May 2026.

States make their own rules, so the picture differs from state to state.

Core items such as PF, ESI and gratuity have carried over unchanged.

Registers, forms, leave detail and working hours are where labour code state rules bite.

Check your state’s labour department directly, because tracker sites often disagree.

What has already changed across India?

First, the basics. The four codes replace 29 older laws. They took legal effect on 21 November 2025, and the Ministry of Labour and Employment notified the Central Rules on 8 May 2026.

So several things now apply nationally, whatever your state says:

Appointment letters now go to every employee.
Fixed-term employees get the same benefits as permanent staff, plus gratuity after one year of service.
The wage definition adds excess allowances back into wages when they go above 50% of total pay.
Core rates and thresholds carried over. Employer PF stays at 12% of basic wages, ESI still applies below the wage limit, and gratuity keeps its five-year rule for permanent staff.

Our guide to the Labour Codes for foreign employers covers those national changes in more depth.

Why do labour code state rules matter so much?

Labour is a shared subject in India. So the centre sets the framework, while each state writes rules for its own establishments. In practice, your state decides a lot of the detail you actually file and follow.

Consequently, two companies with identical policies can face different duties, simply because they sit in different states. Therefore, a single national checklist is not enough.

Which areas do labour code state rules control?

Broadly, the table below shows where to look for each answer.

Area	Set centrally	Shaped by your state
Wage definition and the 50% rule	Yes	Little room to differ
PF, ESI and gratuity rates	Yes	No
Appointment letter duty	Yes	Format details
Registers, returns and forms	Framework only	Yes, including the actual forms
Leave, holidays and weekly off	Framework only	Yes
Working hours, shifts and overtime	Framework only	Yes, including night shift conditions
Standing orders	The 300-worker threshold is in the Code	Model orders and certification, usually by the state
Professional Tax and Labour Welfare Fund	No	Yes, and rates differ
Inspections and filing portals	Framework only	Yes

In short, pay and benefits are mostly national. Paperwork, timing and working conditions are mostly local.

How do you check the labour code state rules that apply to you?

Meanwhile, states are moving at different speeds. Some have notified rules under all four codes, while others are still at the draft stage. Public trackers often disagree with each other, so verify before you act. Here is a simple process.

List your locations. Include every office, plant and registered address, plus any state where staff work from home.
Go to the source. Check each state’s labour department website and its official gazette, rather than a summary blog.
Check the stage. Draft rules are not binding, while notified rules are. Note the date of each notification.
Map the forms. Registers, returns and filing portals change with the rules, so list what each state now wants.
Ask your auditor or counsel. Ask for written confirmation on anything that affects pay, hours or exits.
Diary a review. Set a quarterly check, because more states are notifying rules through 2026 and 2027.

For central updates, use the Ministry of Labour and Employment site and the Shram Suvidha portal.

What should employers do while labour code state rules settle?

Fix salary structures first. Because the 50% wage rule applies now, it changes PF and gratuity costs.
Issue appointment letters to everyone. This is a national duty, not a state one.
Review fixed-term contracts. Equal benefits and one-year gratuity apply. Our note on fixed-term employment explains the change.
Keep old registers running. Do not retire a register until your state confirms the replacement.
Brief your managers. Working hours and leave questions usually reach a manager first, so they need the answers.
Watch multi-state teams. Remote staff can pull you into a state where you have no office.

If you would rather not track this yourself, our statutory compliance service covers registrations, filings and state-level duties.

How TMS can help

TMS has handled Indian statutory compliance for employers since 2006, across multiple states. Our compliance team tracks central and state notifications, runs the filings and keeps your registers current, so your HR team does not have to chase each gazette.

This guide is general information, not legal advice. Rules are still being notified state by state, so confirm your position with your own adviser.