Overview
- The central government notified the increase from Rs 15,000 to Rs 25,000 in the Official Gazette on Sept 17, 2026, making the higher ceiling effective the same day.
- EPFO FAQs show employees will pay 12% of wages up to the new ceiling (Rs 3,000 on Rs 25,000) and employers will contribute 3.67% to PF plus a larger share to the pension scheme, taking mandatory monthly PF transfers to Rs 3,917 at the ceiling.
- For wages within the ceiling a bigger slice of the employer share will go to the Employees’ Pension Scheme (for example Rs 2,083 on a Rs 25,000 salary), while employees paid above the ceiling receive PF contributions only on Rs 25,000 and no employer pension contribution.
- EPFO has told employers to update payroll systems, check contractor compliance and refrain from recovering statutory employer contributions from staff by labelling them part of CTC; the government points employers toward PM Viksit Bharat Rojgar Yojana incentives of up to Rs 3,000 per new job as a partial offset.
- Officials say the move extends social security to about one crore more workers because minimum wages in several states have crossed the old ceiling, and it will mainly affect small and medium employers through higher compliance costs and payroll changes.