Payroll & HR
EPF Wage Ceiling Rs 25,000: What Small Employers Must Do
The EPF wage ceiling rose to Rs 25,000 on 17 September 2026. Who is newly covered, what it costs per employee, and what to check in your payroll.
Facts checked on 2 November 2026.
If you run a small business in Mumbai, Navi Mumbai or anywhere else in India, your Provident Fund bill changed in September 2026. The wage ceiling for EPF moved from Rs 15,000 to Rs 25,000 a month. This guide explains what changed, who is newly covered, what it costs per employee, and what to check in your payroll. It is a plain-language guide, not legal advice, so please confirm the points with your CA or labour consultant.
What changed, and when
The Labour Ministry raised the wage ceiling under the Code on Social Security, 2020 to Rs 25,000 a month, with effect from 17 September 2026 (SCC Online; TeamLease RegTech). The notification is S.O. 5109(E) dated 17 September 2026, according to a copy of the EPFO's own FAQs hosted on StaffNews. The ceiling had stood at Rs 15,000 since September 2014, says the same FAQ.
The ceiling applies to EPF, EPS (the pension scheme) and EDLI (the insurance scheme). The FAQ also says that a report of a possible delay to 1 October 2026 is not true, and that the revised ceiling remains effective from 17 September 2026.
Who becomes newly covered
Employees whose PF wages are above Rs 15,000 and up to Rs 25,000 now come within mandatory coverage. The FAQ estimates that more than 51 lakh additional employees are brought in. The employer must enrol them. No separate application is needed from the employee.
Two points that small employers often get wrong:
- PF wages are not gross salary. The FAQ says the ceiling is tested against wages as defined in the Code, meaning basic plus dearness allowance plus retaining allowance, and not the full gross. An employee on a gross of Rs 50,000 whose PF wages are Rs 25,000 is covered. An employee on a gross of Rs 60,000 whose PF wages are Rs 30,000 is not required to be covered, though he can opt in with the employer's consent.
- Nobody has to be cut down to Rs 25,000. The FAQ says employees already contributing on higher wages do not have to reduce their contribution to the new ceiling. Where wages are above Rs 25,000, the statutory contribution may generally be limited to the ceiling unless the person is covered on higher wages under the scheme.
What it costs per employee
The employee pays 12% of PF wages. The employer also pays 12%, split as 8.33% to the pension scheme (EPS) and 3.67% to EPF. On top of that the employer pays 0.5% for EDLI and 0.5% as admin charges. The FAQ's own table gives these monthly amounts from the October 2026 wage month.
| PF wages (Rs) | Employee EPF | Employer EPS | Employer EPF | EDLI | Admin |
|---|---|---|---|---|---|
| 10,000 | 1,200 | 833 | 367 | 50 | 50 |
| 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 |
Take one employee with PF wages of Rs 20,000. Before 17 September, contributions stopped at the Rs 15,000 line unless you chose to pay on more. Now the employee share is Rs 2,400 instead of Rs 1,800, which is Rs 600 a month more. Your share goes from Rs 1,950 to Rs 2,600 once EDLI and admin are counted, which is Rs 650 more. Multiply that by the number of people between Rs 15,000 and Rs 25,000 on your rolls to find your new monthly cost. The FAQ notes that the minimum admin charge is Rs 500 a month for an establishment with at least one contributing member.
Your cost may be partly offset. The FAQ mentions an incentive of up to Rs 3,000 a month for each additional employment created under the PMVBRY scheme, subject to its conditions.
How September 2026 was split
The change came in the middle of a month, so September has two periods. Contributions for 1 to 16 September follow the old Rs 15,000 ceiling. Contributions for 17 to 30 September follow the new one. You still file one ECR for the month (EPFO FAQ).
The FAQ's example for an existing member on Rs 20,000: PF wages for September come to Rs 17,333.33, which is Rs 8,000 for the first 16 days (15,000 x 16/30) plus Rs 9,333.33 for the last 14 days (20,000 x 14/30). The employee share is 12% of that, Rs 2,080.
If an employee newly made eligible could not have the extra share deducted from September pay, the FAQ says the employer may recover it in the next payroll cycle without asking the Inspector-cum-Facilitator for approval. The ECR and the full payment must still be made on time.
The September due date: sources differ
The EPFO FAQ says the September return is ordinarily due by 15 October. TAXAJ reports that the due date for the September 2026 wage month only was extended to 31 October 2026, and that the October return is due on 15 November 2026 as usual. We could not confirm the extension from an official page. Both dates have passed as of 2 November 2026. If you have not yet filed September's ECR, speak to your PF consultant today and check the EPFO portal for the current position.
ESI did not move
ESI stays at Rs 21,000 a month of gross wages, per TAXAJ. The rates are 0.75% from the employee and 3.25% from the employer (Tally Solutions guide, updated 10 August 2026). A person earning Rs 22,000 gross now has PF but no ESI.
Salary structure: what you can and cannot do
It is tempting to rework salary structures so that less of the pay counts as PF wages. Be careful. The FAQ says CTC is not a statutory concept for PF, and that an employer's statutory contribution cannot simply be treated as an employee deduction because it is called part of CTC. It also says the Rs 25,000 figure should not be applied mechanically to everyone. Look at each employee's existing PF status. The new labour codes also have a wage definition that may limit how much of pay can sit outside PF wages. Our guide to the labour codes in Maharashtra explains where that stands. Any restructuring should be done with your consultant, and with the employee's agreement.
What to check in your payroll software
- The PF base. Is it basic plus DA, and does it use the Rs 25,000 ceiling from 17 September 2026?
- The split month. Does September show two periods, or did someone fix it by hand?
- EPS membership. Employees newly brought in on wages between Rs 15,000 and Rs 25,000 become EPS members from 17 September.
- The ECR file. Can the software make it, or do you key figures into the EPFO portal?
- ESI. Does it still stop at Rs 21,000 gross?
In BecozAI, PF, ESI, professional tax and TDS work in the pay run, and each is switched on in HR settings. BecozAI does not make the PF ECR file or the ESIC upload file, so you use the pay run figures on the portals yourself. Whether your pay run uses the new Rs 25,000 ceiling is something to test: in the 7-day free trial, run one employee whose PF wages are Rs 20,000 and compare the PF line with the table above. If it does not match, tell us. You can read more on our Mumbai payroll page and the payroll product page.
This guide is information, not advice. Please confirm the points in it with your CA or labour consultant.