The Ministry of Labour and Employment has notified a new wage ceiling of ₹25,000 per month for provident fund purposes, raising it from ₹15,000. The change applies from 17 September 2026.
The notification
- Notification: S.O. 5109(E) dated 17 September 2026, published in the Gazette of India (Extraordinary) No. 4918
- Legal basis: Section 2(89) of the Code on Social Security, 2020, for the purposes of Chapter III (Employees’ Provident Fund)
- It supersedes the earlier Notification S.O. 2702(E) dated 29 May 2026 and is effective from the date of publication
What changes?
- Mandatory coverage: employees whose Basic + DA is up to ₹25,000 per month must now be PF members. Earlier, the limit was ₹15,000.
- Newly covered employees: employees earning between ₹15,001 and ₹25,000 who were earlier treated as “excluded employees” must now be enrolled.
- Pension (EPS): the 8.33% employer share to EPS is calculated on wages up to the ceiling. On a ₹25,000 ceiling, this works out to a maximum of about ₹2,083 per month, compared with ₹1,250 earlier.
- Employees above ₹25,000 can still join voluntarily.
Impact on salary and cost
For an employee with Basic + DA of ₹22,000 who was not covered earlier, the employer now has to contribute 12% (₹2,640) plus EDLI and administrative charges, and the employee’s 12% (₹2,640) is deducted from salary. Take-home pay reduces, but retirement savings and pension coverage increase.
Action checklist for employers
- Identify all employees with Basic + DA between ₹15,001 and ₹25,000
- Generate UANs and complete KYC for newly covered employees
- Update the payroll software with the new wage ceiling for PF, EPS and EDLI
- File the ECR for September 2026 onwards with the revised wages, by the 15th of the following month
- Inform employees about the change in deductions
Late or incorrect contributions attract interest and damages, so make the changes from the effective date. See our PF & ESI Compliance page for full details.
Talk to Om Jha & Associates
Our office in Dwarka, New Delhi handles the complete process for you. Call or WhatsApp +91-9899129125, email opjhaom@gmail.com, or book a free consultation. Office hours: Monday to Saturday, 10 am to 7 pm.