EPF for Employers in 2026: Rates, the New ₹25,000 Wage Ceiling and How to Calculate PF
Everything an Indian employer needs to know about EPF in 2026: 12% + 12% split into EPF, EPS and EDLI, the wage ceiling raised to ₹25,000 from 17 September 2026, the 50% wage rule and worked examples.
pagar karo Payroll Desk· Published 24 Oct 2026· Updated 28 Oct 2026· 4 min readEmployee and employer each contribute 12% of PF wages. The employer’s 12% is split into 8.33% to the pension scheme (EPS, on wages up to the ceiling) and the rest to EPF; the employer also pays 0.5% EDLI and 0.5% admin charges. From 17 September 2026 the wage ceiling is ₹25,000 a month (it was ₹15,000), so the maximum EPS contribution is ₹2,082.50 and restricted PF is ₹3,000 from each side.
- Wage ceiling: ₹25,000 a month from 17 September 2026 (notification S.O. 5109(E)); ₹15,000 before.
- Employer 12% = EPS 8.33% (capped at the ceiling) + EPF balance. EDLI 0.5% and admin 0.5% on top.
- PF wages follow the Labour Codes definition: if excluded allowances exceed 50% of pay, the excess counts as wages.
- Pay by the 15th of the following month through the ECR on the EPFO portal.
Who must pay EPF
An establishment with 20 or more employees must register with the Employees’ Provident Fund Organisation (EPFO); smaller ones can join voluntarily. Once covered, every eligible employee gets a Universal Account Number (UAN) and PF is deducted every month.
EPF contribution rates
| Contribution | Rate | On | Paid by |
|---|---|---|---|
| Employee PF | 12% | PF wages (restricted to the ceiling or actual) | Employee (deducted from salary) |
| Pension (EPS) | 8.33% | PF wages up to the ceiling only | Employer |
| Employer EPF | 12% − EPS | PF wages | Employer |
| EDLI (insurance) | 0.5% | PF wages up to the ceiling | Employer |
| Admin charges | 0.5% | PF wages (minimum ₹500 a month per establishment) | Employer |
The ₹25,000 wage ceiling (from 17 September 2026)
The government raised the EPF wage ceiling from ₹15,000 to ₹25,000 a month, effective from the date of the Gazette notification, 17 September 2026 — the first revision since 2014. Three practical effects for employers:
- Higher cost for capped contributors. If you restrict PF to the ceiling, employer PF rises from ₹1,800 to ₹3,000 a month per employee earning ₹25,000 or more (plus EDLI and admin).
- More people covered. New joiners with PF wages between ₹15,001 and ₹25,000 are no longer “excluded employees”.
- Higher EPS. EPS is now 8.33% of up to ₹25,000 — a maximum of ₹2,082.50 a month instead of ₹1,250.
What counts as “PF wages” now
Since the Code on Social Security came into force on 21 November 2025, wages for PF, ESI and gratuity follow a single definition. Basic, DA and retaining allowance are wages; items like HRA, conveyance, overtime and bonus are excluded — but if the excluded items add up to more than 50% of total remuneration, the excess is added back to wages. Lowering Basic no longer lowers the PF base below half of pay.
Worked examples (monthly)
Example 1: Basic + DA ₹18,000, restricted to the ceiling
| Employee PF (12% × 18,000) | ₹2,160 |
| EPS (8.33% × 18,000) | ₹1,499.40 → ₹1,499 |
| Employer EPF (2,160 − 1,499) | ₹661 |
| EDLI (0.5% × 18,000) | ₹90 |
| Admin (0.5% × 18,000) | ₹90 |
Example 2: Basic + DA ₹40,000, restricted to the ceiling
| PF wages used | ₹25,000 |
| Employee PF | ₹3,000 |
| EPS (8.33% × 25,000) | ₹2,082.50 → ₹2,083 (rounding per ECR practice) |
| Employer EPF | ₹917 |
If you contribute on actual wages instead, employee and employer PF become ₹4,800 each — but EPS stays capped at ₹2,083 and the balance goes to EPF.
Monthly process and due dates
- Close attendance and process payroll — PF wages depend on payable days.
- Generate the ECR (electronic challan cum return) with UAN-wise wages and contributions.
- Upload on the EPFO portal and pay by the 15th of the following month.
- Keep the challan receipt with the payroll register.
Late payment attracts interest and damages, so put the date in a compliance calendar.
How pagar karo handles PF
- Dated rate tables: the ₹15,000 and ₹25,000 ceilings each apply from their own dates.
- Per-staff choice of restricted or actual-wage contribution; EPS always capped.
- The Code wage definition (50% add-back) applied automatically and shown in “View calculation”.
- PF register, PF return data, and challan tracking with due-date reminders on the Compliance page.
Frequently asked questions
What is the PF wage ceiling in 2026?
₹25,000 per month from 17 September 2026, raised from ₹15,000 by Gazette notification S.O. 5109(E). Employers who contribute on capped wages now contribute up to ₹3,000 a month per employee instead of ₹1,800.
How much of the employer’s PF goes to pension (EPS)?
8.33% of PF wages up to the ceiling — at most ₹2,082.50 a month from 17 September 2026. The rest of the employer’s 12% goes to the employee’s EPF account.
Is PF mandatory for employees earning above ₹25,000?
For a new joiner who was never a PF member and whose PF wages exceed the ceiling, membership is not mandatory. Existing members continue. Employers can also choose to contribute on full wages.
When is the PF due date?
Contributions for a month are due by the 15th of the following month, filed through the ECR on the EPFO unified portal.
- PIB — Revision of EPF wage ceiling (press release)
- PIB — Cabinet approves revision of wage ceiling
- Corporate Professionals — EPF wage ceiling moves to ₹25,000: key changes and employer impact
- Upstox — EPFO wage ceiling hike: impact
- ESIC — change in definition of wages under the Code on Social Security, 2020
This guide is general information for employers in India, checked against the sources above on 28 Oct 2026. Rules and rates change — confirm with your CA or the official notification before acting.