EPFO: Wage ceiling increased from 15,000 to 25,000

The Ministry of Labour & Employment, by Notification S.O. 5109(E) dated 17 September 2026, issued under Section 2(89) of the Code on Social Security, 2020 (CoSS), has notified ₹25,000 per month as the wage ceiling for the purposes of Chapter III of the Code (Employees’ Provident Fund). The notification supersedes the earlier Notification S.O. 2702(E) dated 29 May 2026 and is effective from the date of its publication in the Official Gazette, i.e. 17 September 2026.

02  WHAT HAS CHANGED

* Where contributions are restricted to the ceiling. Employers already contributing on actual (higher) wages continue to do so.

03  WHO IS IMPACTED — QUICK DECISION GUIDE

04  NEWLY COVERED EMPLOYEES — ENROLMENT

1. Identify all employees whose wages are between ₹15,001 and ₹25,000 and who were not members of EPF so far (including those with basic salary above ₹15,000 who were treated as excluded employees).
2. Generate UAN for each such employee (UAN generation through Face Authentication Technology via UMANG, as currently required by EPFO). Where the employee already holds a UAN from a previous employment, link the existing UAN — do not generate a duplicate.
3. Bring them into coverage with date of joining in EPF as 17 September 2026 (or actual date of joining, for employees who joined after that date).
4. Complete KYC (Aadhaar, bank account, PAN), obtain the declaration form and file e-nomination.
5. Evaluate and enrol eligible employees under the PMVBRY scheme so that the employer incentive can be claimed from the Department (see Section 07).
6. Include these employees in the September 2026 ECR with pro-rata wages from 17 September.

05  EXISTING MEMBERS — REVISED CONTRIBUTION BASE

1. Identify members whose wages exceed ₹15,000 and whose contribution is currently being remitted up to the ceiling of ₹15,000. Their contribution will now be remitted on the revised wage ceiling of ₹25,000 (or actual wages, if lower).
2. For September 2026, compute contribution on a split basis: 1–16 September on ₹15,000 ceiling and 17–30 September on ₹25,000 ceiling.
3. Employee share will increase (up to ₹1,200 per month at full ceiling), reducing take-home pay. We recommend a short communication to affected employees explaining the higher retirement savings and pension benefit.

Illustration — September 2026 (30 days), employee with Basic + DA of ₹30,000, contribution restricted to ceiling

06  EMPLOYEES’ PENSION SCHEME (EPS) AND COST IMPACT

• Employees who are members of EPS will be covered on the revised ceiling effective 17 September 2026 — i.e. pension contribution is now computed on wages up to ₹25,000 (8.33% = up to ₹2,083 per month).
• EPS membership for new entrants is available only to employees drawing wages (Basic + DA) up to ₹25,000 at the time of joining. Employees above ₹25,000 remain EPF-only.
• Members aged 58 years and above: no EPS contribution — the entire employer share goes to EPF (no change).

Cost impact at a glance

07  PMVBRY — RECOUPING THE ADDITIONAL COST

EPFO has indicated that the additional financial burden on employers can be recouped through the Pradhan Mantri Viksit Bharat Rozgar Yojana (PMVBRY – Employee Enrolment valid till 31^st July, 2027)

• Employer incentive of up to ₹3,000 per employee per month for eligible additional employees.
• Available for 2 years for non-manufacturing and 4 years for manufacturing establishments.
• Pre-requisites: Aadhaar-seeded UAN, complete KYC and timely ECR filing. Scheme conditions (minimum additional hires, sustained employment period, wage slabs) apply — eligibility should be checked establishment-wise.

08  OTHER COMPLIANCE CONSIDERATIONS

• Timelines: September 2026 contributions (including pro-rata amounts) are due by 15 October 2026. Delays attract interest and damages.
• HR documentation: update offer letter templates, CTC structures, payroll masters and PF policies for the new ceiling. Any restructuring of CTC should be reviewed for legal compliance before implementation.
• ESIC: this notification does not change the ESIC wage ceiling (₹21,000).
• Once a member, always a member: employees enrolled now continue as members even if wages later exceed ₹25,000.

09  ACTION CHECKLIST

Click here for the links for PMVBRY:

• PM Viksit Bharat Rozgar Yojana (PM-VBRY) – Employment Linked Incentive (ELI) Scheme
• Registration of Establishment under PMVBRY

Please find attached the official notifications below:

EPF ceiling

Press Release for EPF wage enhancement

Notification for increasing wage ceiling to 25K