Salary & tax
EPF wage ceiling raised to ₹25,000: what it means for your salary
From 17 September 2026, the wage ceiling for provident fund, pension and EDLI is ₹25,000 a month instead of ₹15,000. For many salaried people, that means a larger PF deduction and a smaller monthly credit. Here is how to work out your own change.
By the CALQEVA editorial team2 min read
What changed
Notification S.O. 5109(E), issued under the Code on Social Security, 2020, raised the monthly wage ceiling from ₹15,000 to ₹25,000 with effect from 17 September 2026. The ceiling applies to the provident fund, the Employees' Pension Scheme and the deposit-linked insurance scheme.
The contribution rates did not change: 12% of wages from the employee and 12% from the employer. What changed is the wage the 12% can be capped at, so the maximum mandatory contribution rose from ₹1,800 to ₹3,000 a month from each side.
Are you affected?
It depends on your basic pay plus dearness allowance (the PF wage) and how your employer calculates PF:
- PF wage of ₹15,000 or less: no change. Your PF was already 12% of your full wage.
- PF wage above ₹15,000, and your employer capped PF at the ceiling: your PF rises to 12% of your wage up to ₹25,000.
- Your employer already calculated PF on your full basic pay: usually no change in the amount.
- PF wage between ₹15,000 and ₹25,000 and you were not previously covered: you are now brought under mandatory coverage, subject to the scheme rules.
Worked examples
For employees whose employer caps PF at the statutory ceiling, the monthly employee share changes like this:
- Basic ₹12,000: ₹1,440 before and after (no change).
- Basic ₹20,000: ₹1,800 before (12% of ₹15,000), ₹2,400 after (12% of ₹20,000).
- Basic ₹25,000: ₹1,800 before, ₹3,000 after.
- Basic ₹40,000: ₹1,800 before, ₹3,000 after (capped at 12% of ₹25,000).
How much less will reach your bank account?
Your own extra contribution comes straight out of your monthly pay, so take-home falls by that amount: up to ₹1,200 a month. Whether the employer's matching increase also reduces your pay depends on your salary structure.
If your CTC includes the employer's PF contribution, which is common, the employer's extra share also comes out of the same CTC. Take-home can then fall by up to ₹2,400 a month. If your employer pays its share on top of your CTC, only your own share affects take-home. Your offer letter or HR team can tell you which applies.
The money is not lost. Both shares go into your PF and pension accounts, earn interest, and become available under the scheme's rules. Enter your own CTC and basic pay in the salary calculator to see the new monthly in-hand figure.
The pension (EPS) part
Out of the employer's 12%, 8.33% of wages up to the ceiling goes to the Employees' Pension Scheme and the rest to your PF account. With the higher ceiling, the pension portion can now be up to about ₹2,083 a month instead of ₹1,250. This changes how the employer's 12% is split, not the total.
September 2026 and voluntary PF
For September 2026, the old ceiling applies to 1–16 September and the new one from 17 September, so your September payslip may show a PF figure between the old and new amounts. If an employer could not deduct the extra employee share in September, it can be recovered in the next payroll.
Voluntary PF (VPF) elections are separate from the mandatory share and do not change automatically. If you increased VPF earlier to save more, review whether you still want the same amount on top of the higher mandatory contribution.
Try it with your own numbers
Keep reading
- CTC versus in-hand salary: where the money goesA line-by-line explanation of why a ₹12 lakh CTC does not mean ₹1 lakh a month, covering PF, gratuity, professional tax and income tax.
- Old or new tax regime: which one fits youThe new regime has lower rates, the old one has deductions. Here is how to work out which leaves you with more, using your own numbers.