Revision of EPFO Statutory Wage Ceiling

 

From ₹15,000 per month to ₹25,000 per month.

Notification	Effective Date	Revised Wage Ceiling	Earlier Wage Ceiling
S.O. 5109(E) dated 17 September 2026	17 September 2026	₹25,000 per month	₹15,000 per month

 

Q1. What is the wage ceiling under EPFO?

Answer: The wage ceiling under EPFO is the maximum monthly wage taken into account for determining mandatory EPF, EPS and EDLI coverage under the Code on Social Security, 2020. It has now been revised from ₹15,000 to ₹25,000 per month, bringing a larger number of employees within the ambit of mandatory coverage, subject to the applicable provisions of the schemes.

Q2. From what amount has the wage ceiling been revised, and to what?

Answer: The statutory wage ceiling has been increased from ₹15,000 per month to ₹25,000 per month.

Q3. In simple terms, what does raising the ceiling from ₹15,000 to ₹25,000 mean for an ordinary employee?

 Answer: It means employees drawing wages of up to ₹25,000 per month will now be mandatorily required to become members of the EPF, EPS and EDLI schemes, and both employees and employers will contribute on wages up to ₹25,000. This extends social-security coverage to more employees and enhances the quantum of benefits available under EPF and EPS.

Q4. How will the increase in the EPF wage ceiling from ₹15,000 to ₹25,000 effective from 17.09.2026 will affect the contributions of an employee earning ₹20,000 per month? Give illustrations for filing of ECR for the month of September 2026.

Answer: For an employee earning wages of ₹20,000 per month the calculation of contribution for the month of September 2026 is as follows: 

Contribution Head for September 2026	Scenario A: Existing employee  who becomes a member from 17.09.2026	Scenario B: Existing Member (EPF & EDLI only) contributing on ₹20,000 Newly Enrolled in EPS from 17.09.2026 Scenario	C: Existing Member (EPF, EPS & EDLI) Contributing on ₹15,000 Cap till 16.09.2026, Moving to ₹20,000 from 17.09.2026
Proportionate wages for 01.09.2026 to 16.09.2026 i.e. 16 days	₹0  (Excluded employee till 16.09.2026; wages exceeded ₹15,000 ceiling)	₹10,666.67  (₹20,000 × 16/30)	₹8,000.00  (₹15,000 × 16/30)
Proportionate wages (17.09.2026 to 30.09.2026)	₹9,333.33  (₹20,000 × 14/30;)	₹9,333.33  (₹20,000 × 14/30)	₹9,333.33  (₹20,000 × 14/30)
Total September Wage (EPF)	₹9,333.33	₹20,000.00	₹17,333.33
Total September Wage (EPS)	₹9,333.33	₹9,333.33	₹17,333.33
Employee Contribution EPF (12%)	₹1,120.00  (12% of ₹9,333.33)	₹2,400.00  (12% of ₹20,000.00)	₹2,080.00  (12% of ₹17,333.33)
Employer contribution EPF (A/c 1)	₹342.53  (3.67% of ₹9,333.33)	₹1,622.53  (12% on ₹10,666.67 + 3.67% on ₹9,333.33)	₹636.13  (3.67% of ₹17,333.33)
Employer contribution EPS (A/c 10)	₹777.47  (8.33% of ₹9,333.33)	₹777.47  (₹0 in Period 1 + 8.33% on ₹9,333.33 in Period 2)	₹1,443.87  (8.33% of ₹17,333.33)
Employer EDLI (A/c 21 - 0.50%)	₹46.67  (0.50% of ₹9,333.33)	₹100.00  (0.50% of ₹20,000.00)	₹86.67  (0.50% of ₹17,333.33)
Admin Charges (A/c 2 - 0.50%)	₹46.67  (0.50% of ₹9,333.33)	₹100.00  (0.50% of ₹20,000.00)	₹86.67  (0.50% of ₹17,333.33)
Total Statutory Remittance for September in respect of member	₹2,333.34	₹5,000.00	₹4,333.34

 

Q5. Will employers have to file two ECRs for September 2026?

Answer: No. The September 2026 wage month is to be dealt with through the applicable ECR filing mechanism in a SINGLE ECR, with the contribution calculated appropriately taking into account the two wage ceiling periods (See the illustration in Q4 above). The return for September 2026 is ordinarily due by 15 October 2026.

Q6. How should an employer report contribution for existing employees in the ECR for the wage month September 2026 (effective 17.09.2026)?

Answer: For an existing employee, the employer should calculate contributions separately for the two periods:

Period 1: Up to 16.09.2026 Contribution will be calculated subject to the earlier wage ceiling of ₹15,000.

Period 2: From 17.09.2026

Contribution will be calculated subject to the revised wage ceiling of ₹25,000.

In case an existing employee is an EPF member and excluded under EPS, and his wages are in the range of 15000-25000, such employee needs to be made a member of EPS w.e.f. 17.09.2026. accordingly, his contributions towards EPS starts from 17.09.2026.

Illustration

An employee has EPF wages of ₹20,000 per month and was not a member of EPS earlier. He will now become a member w.e.f. 17.09.2026

For September 2026 (See the detailed illustration in Q4 above).:

Period	Applicable ceiling	EPF wages considered	EPS wages
01.09.2026 to 16.09.2026	₹15,000	₹15,000	NIL
17.09.2026 to 30.09.2026	₹25,000	₹20,000	₹20,000

 

Q7. Can the additional employee contribution for September 2026 be recovered from the October salary?

Answer: Where additional employee contribution becomes payable from 17 September 2026, the contribution is attributable to the September 2026 wage month and should be reported/remitted through the September 2026 ECR. Where deduction from salary could not be effected for employees newly made eligible for coverage, employers will be permitted to defer recovery of the Employee Share (EE) to the next payroll cycle for the purposes of Member take home salary computation without seeking any formal relaxation or prior approval from the Inspector-cum-Facilitator; instructions in this regard are being issued by EPFO. However, the employer should still file the ECR for the September wage month on or before the due date, giving full details of employee and employer contribution (See the illustration in Q4 above), and remit the contribution within the timeline to avoid interest and penalty.

For different salary structure, the payment of EPF dues from October wage month may be seen as follows: 

Monthly PF Wages (Basic + DA)	Employee Share: EPF (12%)	Employer Share: EPS (8.33%)	Employer Share:  EPF (3.67%)	EDLI Contribution (0.5%)	EPF Admin Charges (0.5%)
₹ 10,000	₹ 1,200	₹ 833	₹ 367	₹ 50	₹ 50
₹15,000 (Old Cap)	₹ 1,800	₹ 1,250	₹ 550	₹ 75	₹ 75
₹20,000 (New Bracket)	₹ 2,400	₹ 1,666	₹ 734	₹ 100	₹ 100
₹25,000 (New Cap)	₹ 3,000	₹ 2,083	₹ 917	₹ 125	₹ 125
₹35,000 (Above Cap)	₹ 3,000	0*	₹ 3000 (@12%)	₹ 125	₹ 125

 

*Membership of EPS is available only to such employees whose wages as on the date of joining or as on the date of implementation of new wage ceiling, do not exceed the wage ceiling (i.e.₹25,000 per month w.e.f 17.09.2026).

The minimum administrative charges are, however, ₹500 per month for such establishment, which have at least one contributing member during the month and   ₹75 per month per establishment, in case the establishment has no active contributory members during that specific wage month.

Q8. How will the wage ceiling affect CTC?

Answer: CTC is not itself a statutory concept for determining the employer's PF liability. PF contributions have to be determined with reference to the applicable statutory definition of wages and the relevant provisions. CTC is a generally considered total cost incurred by the employer towards the employee. This represents an arrangement between the employer and the employee. If contributions were being made on the earlier wage ceiling of ₹15,000 but the actual PF wages were higher, the increase in the wage ceiling will increase the EPF, EPS, EDLI and Admin charges accordingly. Employers should view their share of the social security contributions as a way to promote robust HR practice with the objective of increasing employee satisfaction and retention.

Q9. How will the wage ceiling affect CTC?

Answer: CTC is not itself a statutory concept for determining the employer's PF liability. PF contributions have to be determined with reference to the applicable statutory definition of wages and the relevant provisions. CTC is a generally considered total cost incurred by the employer towards the employee. This represents an arrangement between the employer and the employee. If contributions were being made on the earlier wage ceiling of ₹15,000 but the actual PF wages were higher, the increase in the wage ceiling will increase the EPF, EPS, EDLI and Admin charges accordingly. Employers should view their share of the social security contributions as a way to promote robust HR practice with the objective of increasing employee satisfaction and retention.

Q10. Can an employer recover the increased employer PF contribution from the employee by adjusting CTC?

Answer: The employer's contribution and the employee's contribution are legally distinct. CTC is not itself a statutory concept for determining the employer's PF liability — PF contributions have to be determined with reference to the applicable statutory definition of wages and the relevant provisions. The employer's statutory contribution cannot simply be treated as an employee deduction merely by describing it as part of CTC. Employers should ensure that statutory employer contributions are made correctly and that the employee's statutory wages are not reduced contrary to applicable law.

Q11. Does the enhancement mean that every employee must contribute PF on ₹25,000?

Answer: Not necessarily. The ₹25,000 figure is the revised statutory wage ceiling for mandatory coverage under Chapter III of the Code on Social Security, 2020.  Where an employee's wages are lower than ₹25,000, contributions would be determined with reference to the wages.  Where the wages exceed ₹25,000, the statutory contribution may generally be restricted to the prescribed ceiling unless the employee is covered/contributing on higher wages under the applicable provisions and scheme requirements. Employers should therefore examine each employee's existing PF status and contribution arrangement rather than mechanically applying ₹25,000 to every employee.

Q12. My gross salary is ₹60,000 per month, but my EPF wages (Basic + DA + Retaining Allowance) are ₹30,000. Am I required to be covered?

Answer: No. However, you can voluntarily opt to become a member of EPF with the consent of your employer.

Q13. My gross salary is ₹50,000 per month, but my EPF wages are ₹25,000. Am I covered?

Answer: Yes, you are required to be a member under all three schemes — EPF, EPS and EDLI. The fact that your gross salary is ₹50,000 does not by itself exclude you. Your relevant EPF wages are ₹25,000, which is within the revised wage ceiling.

Q14 I am earning ₹20,000 per month and I am currently an excluded employee. What will happen after the increase in the wage ceiling?

 Answer: From the date of the wage-ceiling revision, you are required to become a member of the Employees' Provident Fund, the Employees' Pension Scheme and the Employees' Deposit Linked Insurance Scheme.

Q15. What will happen to exclude employees who were already working as on 17 September 2026 and whose EPF wages are less than ₹25,000?

Answer: The employee is required to be made a member of EPF, EPS and EDLI with effect from 17 September 2026. The employer is required to make contributions for such members from that date.

Q16. Will members have to make a separate application to get covered under the revised ceiling?

Answer: No, the revised statutory ceiling does not require members to submit any separate application. It will be the statutory responsibility of the employer to enrol such members and start compliance for them.

Q17. Will EPS membership be automatic for all employees newly brought within the ₹25,000 ceiling?

Answer: Yes. It will be the statutory responsibility of the employer to enrol such members and start compliance for them.

Source: https://www.epfo.gov.in/