EPF Wage Ceiling Is Now ₹25,000: A Founder’s Guide to What Changes

Last Updated on October 29, 2026 by Abhijit Divekar

You may have seen the headline: the government has raised the EPF wage ceiling to ₹25,000. Effective from 17 September 2026, it replaces the ₹15,000 limit that had been in place since 2014.

If you run a small team, you probably want to know three things. Does this apply to you? What will it cost? What should you do this month? This guide covers each one.

What is the wage ceiling in EPF?

The wage ceiling is the monthly PF wage up to which EPF membership is compulsory and contributions are worked out. From 17 September 2026 it is ₹25,000 a month, up from ₹15,000. It is checked against PF wages, which means basic pay plus dearness allowance, not gross salary or CTC.

October payroll: what to do before 15 November

October 2026 is the first full month at the new ceiling. Its PF is due by 15 November 2026.

1. Enrol everyone newly covered. Anyone with PF wages up to ₹25,000 must be in EPF, EPS and EDLI from 17 September 2026. Create a UAN for anyone who does not have one.
2. Run October on the new ceiling. For staff whose PF was capped at ₹15,000, both shares are now 12% of PF wages up to ₹25,000, so up to ₹3,000 each.
3. Tell staff before payday. Explain why their PF deduction went up and that the money goes into their own PF account.

The ESIC wage limit can affect the same staff, so see our ESIC wage ceiling guide too. If you would rather not handle PF every month, our payroll outsourcing service files it for you.

The news in two minutes

EPFO’s FAQs (September 2026) confirm that September is split at 17 September and filed in a single return.

“Wage” here is not the salary on the offer letter

This is where founders most often get confused. The ceiling does not apply to gross salary or CTC. For PF, “wages” mainly means basic pay plus dearness allowance. If the allowances you leave out come to more than half of total pay, the extra counts as wages anyway.

So someone with a CTC of ₹40,000 could have PF wages of ₹20,000 or ₹24,000, depending on how their salary is structured.

Does the EPF wage ceiling change affect your business?

Ask yourself:

• Are you registered with EPFO? Registration is generally required once you have 20 or more employees, though smaller businesses can register voluntarily.
• Does anyone have PF wages above ₹15,000?
• Do you currently pay PF on a capped ₹15,000 instead of their actual wages?
• Are you about to hire people whose PF wages will be between ₹15,000 and ₹25,000?

If every answer is no, the direct impact is small. If any answer is yes, read on.

A simple example: a 25 person startup

Say six of your employees currently have their PF capped at ₹15,000. Under the new ceiling, their PF is calculated on actual PF wages, up to ₹25,000. Here is what that means each month from October 2026, per employee (September 2026 is worked out on the split method explained above):

Your cost includes 12% PF plus about 1% for EDLI insurance and EPF admin charges. Admin charges have a minimum of ₹500 a month, so very small teams may pay slightly more. The employee’s share stays at 12%, so each of these six people takes home ₹600 or ₹1,200 less a month. That money goes into their own PF account.

What it means for hiring budgets

Under the new EPF wage ceiling, PF is mandatory for new hires with PF wages up to ₹25,000 in an EPF registered business. Until now, many of them did not have to be enrolled in PF. If you have hiring plans, budget about 13% of PF wages for these roles (12% PF plus EDLI and admin charges), and decide whether CTC offers will include it.

Five steps to handle the EPF wage ceiling change

1. List affected employees. Pull everyone whose PF wages are above ₹15,000.
2. Check salary breakups. Make sure basic pay and allowances meet the wage rules. Don’t lower basic pay just to save on PF.
3. Update payroll settings. Change the ceiling in your payroll tool to ₹25,000, effective 17 September 2026.
4. Review offer letter templates. Remove any wording that says PF is paid “on ₹15,000.”
5. Enrol newly covered staff. EPFO’s FAQs say employees with EPF wages up to ₹25,000, including staff who were treated as excluded, must be made members of EPF, EPS and EDLI from 17 September 2026. The employer does this; employees do not need to apply.

New to PF rules in general? Our explainer on PF and ESI rules for employers covers the basics.

Filed September already? How EPFO says it should be worked out

The ceiling changed halfway through September. That makes this month’s PF return different from every month before it and every month after it. Here is what to check before you pay.

1. Find the employees who are newly covered

Anyone whose PF wages (basic pay plus DA) are between ₹15,001 and ₹25,000 was outside mandatory PF before 17 September. In an EPF registered business, they must now be enrolled. Make a list from your payroll, create a UAN for anyone who does not have one, and add them to the return.

2. Update the ceiling in your payroll software

Check that the PF wage ceiling now reads ₹25,000, not ₹15,000. If your software still uses the old figure, everyone paid above ₹15,000 will be under deducted, and you will have to correct it later with interest.

3. Work out September on EPFO’s split method

EPFO’s FAQs on the new ceiling (September 2026) settle this. September 2026 is split into two periods and filed in a single ECR: wages for 1 to 16 September are counted up to the old ₹15,000 ceiling, and wages for 17 to 30 September up to the new ₹25,000 ceiling, each in proportion to the days (16/30 and 14/30).

For comparison, August under the old ceiling was ₹1,800 (12% of ₹15,000), and October onwards is ₹3,000 (12% of ₹25,000). The employer pays a matching 12%, split between EPF and EPS as usual. EPFO’s FAQs also say an employee’s extra share for September can be recovered in the next payroll, but it is still reported in the September return.

4. Pay on time

Late PF payments attract interest and damages, and they are easy to miss in a month with extra work. The September return is now due by 31 October 2026 (extended from 15 October, for September only). If you filed September as a full month at ₹25,000, or entirely on the old ₹15,000 ceiling, check with your adviser whether a correction is needed.

If September is still unpaid, file and pay it on or before 31 October 2026. October 2026 is the first full month at the new ceiling, and its PF is due by 15 November 2026.

Talking to your team

A smaller payslip without any explanation creates distrust quickly. Send a short note before payday: what changed, why their deduction went up, and that the money goes into their own PF and pension. Employees are more likely to accept the change when they understand the extra deduction goes into their own savings.

Why ongoing HR support helps

Rule changes like this rarely come with a neat instruction sheet. Small teams usually find out when an employee questions their payslip or a filing does not match. Having someone who watches for updates and checks salary structures regularly takes that worry off a founder’s plate.

Let HRTailor handle the change for you

HRTailor works as your online HR manager, backed by a team of HR professionals and a cloud HRMS. For this change, we can:

• review which employees are affected
• check salary breakups against the wage rules
• update your payroll and PF settings
• draft your note to employees
• handle PF, ESIC and PT filings under our compliance plan

Talk to us before your next payroll run, and we’ll help you get ready without adding HR work for you.

Book a 30-min call →

Frequently asked questions

When does the new EPF wage ceiling apply?

The new limit starts on 17 September 2026, the date the gazette notification (S.O. 5109(E)) was published. The Cabinet cleared it a day earlier. So wages from that date onwards count under the ₹25,000 limit. For September 2026 only, EPFO’s FAQs say the month is split: up to the ₹15,000 ceiling for 1 to 16 September and up to ₹25,000 from 17 September, in a single return. The date has not been postponed.

Is the ₹25,000 limit checked against an employee’s full salary?

No. It is checked against PF wages, which for most startups means basic pay plus dearness allowance. If the allowances you exclude are more than half of total pay, the extra counts too.

Do we need to act if we have fewer than 20 employees?

EPF registration is generally required once a business has 20 or more employees. If you are below that and not registered voluntarily, the change does not directly apply to you unless you register voluntarily or reach 20 employees, so keep it in mind for future salary budgets.

Will every employee’s take home pay go down?

No. Employees with PF wages of ₹15,000 or less see no change. Those whose PF is capped at ₹15,000 but whose PF wages are higher may see a bigger PF deduction, which lowers take home pay by the same amount.

Does anything change for staff already in PF?

Their PF is now worked out on a higher wage, up to ₹25,000. Also, staff earning between ₹15,000 and ₹25,000 who were in PF but not in the pension scheme must now be added to EPS from 17 September 2026. EPFO’s FAQs on the revised ceiling confirm this.

Do we now pay a higher PF percentage?

No. The contribution is still 12% from you and 12% from the employee. With EDLI and admin charges, your total cost is about 13% of PF wages. What changed is the wage limit this is worked out on.

Please treat this as a general guide, not legal advice. It reflects the position as of 17 October 2026, following gazette notification S.O. 5109(E) of 17 September 2026 and EPFO’s FAQs on the revised wage ceiling.

Where can I find the official ₹25,000 EPF notification?

It is Gazette notification S.O. 5109(E), dated 17 September 2026, issued by the Ministry of Labour and Employment under the Code on Social Security, 2020. You can download it from labour.gov.in. EPFO has also published FAQs on the new ceiling on epfindia.gov.in.

What is the wage ceiling in EPF?

It is the monthly PF wage up to which EPF coverage is mandatory and contributions are worked out. From 17 September 2026 it is ₹25,000. It applies to PF wages (basic pay plus DA), not to gross salary or CTC.

Sources

• Ministry of Labour and Employment, Gazette notification S.O. 5109(E), 17 September 2026
• EPFO, Frequently Asked Questions on the revision of the statutory wage ceiling from ₹15,000 to ₹25,000 (September 2026)
• Cabinet decision, PIB Release ID 2310812, 16 September 2026 (official text via PM India)
• Ministry of Labour and Employment statement on the 17 September start (PTI via Daily Excelsior)
• BusinessToday
• The Policy Edge: approval vs notification
• Economic Times, Mumbai print edition, 17 September 2026