Key facts
| Item | Position |
|---|---|
| New wage ceiling | ₹25,000 per month (earlier ₹15,000, in place since September 2014) |
| Notification | S.O. 5109(E) dated 17 September 2026, under Chapter III of the Code on Social Security, 2020 |
| Effective from | 17 September 2026, the date of publication in the Gazette, in the middle of a wage month |
| Contribution rate | Unchanged: 12% for the employee and 12% for the employer |
| ESI wage ceiling | Unchanged at ₹21,000 per month |
| September 2026 return and payment | Due by 15 October 2026 |
Who is affected
- Employees earning ₹15,001 to ₹25,000 who were not members. They may now come within mandatory EPF, EPS and EDLI coverage from 17 September 2026, subject to the usual membership conditions. Employers should enrol them, generate or link UANs and complete KYC and e-nomination.
- Existing members whose contribution was restricted to ₹15,000. The employer's practice of capping contribution at the ceiling now means a higher base of up to ₹25,000.
- Employees whose wages are above ₹25,000. Existing voluntary members are not affected by the revision. Those who contribute on actual wages continue to do so.
What it costs
Employer and employee each contribute 12% of contributory wages. The employer's 12% is split into 8.33% to the Employees' Pension Scheme (EPS) and 3.67% to EPF. At the new ceiling, the monthly numbers per employee at full ceiling are:
| Component | At ₹15,000 | At ₹25,000 | Increase |
|---|---|---|---|
| Employee share (12%) | ₹1,800 | ₹3,000 | ₹1,200 |
| Employer to EPS (8.33%) | ₹1,250 | ₹2,083 | ₹833 |
| Employer to EPF (3.67%) | ₹550 | ₹917 | ₹367 |
| Employer total (12%) | ₹1,800 | ₹3,000 | ₹1,200 |
EDLI contribution and EPF administrative charges are also calculated on the revised wage base. Try the numbers for your own salary structure in our EPF contribution calculator.
Handling September 2026
Because the ceiling changed on 17 September, September is a split month. Guidance that has circulated since the notification, including FAQs attributed to EPFO, reads it as: 1 to 16 September on the ₹15,000 ceiling and 17 to 30 September on the ₹25,000 ceiling, reported in a single ECR. Other readings have been discussed, such as applying the new ceiling to the whole month, and the notification itself is prospective from 17 September. Because commentary differs on how the return portal handles this, confirm EPFO's latest instructions before filing.
The additional contribution payable from 17 September belongs to the September wage month and should go through the September ECR and challan.
Employer checklist
- Identify newly covered staff earning ₹15,001 to ₹25,000 and enrol them, with UAN, KYC and e-nomination.
- Update the PF wage cap in payroll to ₹25,000 from 17 September 2026, and run September as a split month.
- File the September ECR and pay by 15 October 2026.
- Tell employees what changes in take-home pay before the October payslip. At full ceiling the employee share rises by up to ₹1,200 a month.
- Review CTC structures and offer letters. Cost-to-company packages that include the employer share will carry a higher cost.
- Check contractors and outsourced staff. Staffing and payroll vendors will pass the cost through. Update agreements where needed.
- Do not change ESI. The ESI ceiling is not affected by this notification.
Our payroll outsourcing team handles the set-up, the split-month computation and the filing.
Related
Also effective this month: UPI MDR from 15 October and the new FEMA export-import regulations.
Frequently asked questions
What is the new EPF wage ceiling?
₹25,000 a month from 17 September 2026, up from ₹15,000, which had applied since September 2014.
Does the new ceiling apply from 17 October?
No. It applies from 17 September 2026. The September return and payment are due by 15 October 2026, and October is the first full wage month at the new ceiling.
Who is now covered?
Employees earning between ₹15,001 and ₹25,000 a month become eligible for mandatory EPF, EPS and EDLI coverage, subject to the applicable provisions.
How much more will an employee and employer pay?
Where contribution was restricted to ₹15,000, the employee share rises by up to ₹1,200 a month at the full ceiling. The employer's matching share rises by the same amount.
How should September 2026 be handled?
Because the change took effect mid-month, one reading is a split month: 1 to 16 September on ₹15,000 and 17 to 30 September on ₹25,000. Commentary differs on how the return portal handles this, so confirm EPFO's instructions before filing.
Sources
- BDO India: New EPF ceiling hiked
- AZB & Partners: Enhancement of PF wage ceiling to INR 25,000
- Corporate Professionals: EPF wage ceiling moves to ₹25,000
This article is general information based on public notifications and reporting as of 2026-10-06, and is not professional advice for any specific situation. Rules can change or be clarified after publication. Confirm the current position before acting.