The first change to the PF ceiling since 2014 landed mid-month. Here is who it pulls in, what the new numbers are, and the five things to do before the October run.
The Employees' Provident Fund wage ceiling rose from ₹15,000 to ₹25,000 a month with effect from 17 September 2026 (Ministry of Labour and Employment notification S.O. 5109(E), following Cabinet approval on 16 September). For a small business with a PF-covered establishment, three things change: employees earning between ₹15,001 and ₹25,000 in PF wages are now mandatorily covered rather than optionally; the maximum mandatory contribution rises from ₹1,800 to ₹3,000 on each side; and September itself is a split month — the old ceiling for 1–16 September, the new one from the 17th — reported in one ECR due by 15 October. The government's estimate is that around 51 lakh more employees come under PF, pension and insurance cover. Facts checked 14 October 2026; rely on the Gazette text and EPFO circulars for anything you file.
PF applicability has two layers: the establishment and the employee. The establishment test is unchanged — 20 or more persons in a covered class of establishment, or voluntary registration below that. What moved is the employee layer.
The common mistake is to look only at the first group. The second group — people you may have deliberately kept out of PF at ₹18,000 or ₹20,000 — is where enrolment work and employer cost appear.
| Component | Ceiling ₹15,000 (to 16 Sept 2026) | Ceiling ₹25,000 (from 17 Sept 2026) |
|---|---|---|
| Employee PF, 12% | ₹1,800 | ₹3,000 |
| Employer EPS, 8.33% | ₹1,250 | ₹2,083 |
| Employer EPF, 3.67% | ₹550 | ₹917 |
| EDLI and admin charges | On wages up to the ceiling | On wages up to the new ceiling |
Worked example. PF wages ₹20,000. Before: capped at ₹15,000, employee ₹1,800, employer ₹1,800 (₹1,250 EPS + ₹550 EPF). After: on ₹20,000, employee ₹2,400, employer ₹2,400 (₹1,666 EPS + ₹734 EPF). Take-home falls ₹600; employer cost rises ₹600 plus the small EDLI and admin uplift.
Remember that "PF wages" is the labour-code wages figure. If your structures still have basic below half of total remuneration, the 50% rule raises the base before the ceiling even applies.
September 2026 has two ceilings. Apply ₹15,000 to wages for 1–16 September and ₹25,000 to wages for 17–30 September, pro-rated by days, and report the month in a single ECR due by 15 October. For the ₹20,000 employee above: 16/30 × ₹1,800 = ₹960 plus 14/30 × ₹2,400 = ₹1,120, so ₹2,080 instead of ₹1,800.
If your September payroll had already been run on the old ceiling when the notification arrived — many were — EPFO has indicated the shortfall in the employee share can be recovered in the following payroll. Record it as a separate deduction line with a note, not folded silently into October's PF figure, so the payslip explains itself.
Legally, the employee's 12% is the employee's and the employer's 12% is the employer's. Commercially, in a CTC-structured offer, both sides sit inside the CTC figure and the increase in employer PF reduces some other component unless you top up the CTC. Decide which you are doing for existing staff, say it plainly, and apply one rule to everyone in the band. A silent reduction in "special allowance" to absorb employer PF is the version that ends in a dispute.
Keep this change on the same compliance calendar you use for PT and TDS; the ECR deadline did not move.
| New ceiling | ₹25,000 a month, from 17 September 2026 (S.O. 5109(E)) |
|---|---|
| Old ceiling | ₹15,000, unchanged since September 2014 |
| Employee share, max | ₹3,000 (12% of ₹25,000); was ₹1,800 |
| Employer EPS, max | ₹2,083 (8.33%); was ₹1,250 |
| Employer EPF, max | ₹917 (3.67%); was ₹550 |
| September 2026 | Split month: old ceiling 1–16, new ceiling 17–30; one ECR due 15 October |
| Establishment threshold | Unchanged: 20 or more persons, or voluntary coverage |
| Newly covered | Government estimate: about 51 lakh employees |
₹25,000 a month, effective 17 September 2026, replacing the ₹15,000 ceiling that had applied since 2014. Employees whose PF wages are up to ₹25,000 are mandatorily covered, and contributions are computed on wages up to that figure.
If PF wages (basic plus DA) are ₹25,000, the employee contribution is ₹3,000 (12%). The employer also contributes ₹3,000, split as ₹2,083 to the pension scheme (8.33%) and ₹917 to the provident fund (3.67%), plus EDLI and administrative charges.
Not if they have never been a PF member — they remain excluded employees unless the employer and employee agree to contribute voluntarily. An employee who is already a member from a previous job stays a member regardless of salary.
Pro-rate by days: apply the ₹15,000 ceiling to 1–16 September and the ₹25,000 ceiling to 17–30 September, and report the month in one ECR due by 15 October. If the extra employee share was not deducted in September, EPFO permits recovering it in the next payroll cycle.
No. The establishment threshold is unchanged. A business below 20 employees that is not voluntarily registered is not brought into PF by the ceiling change.
For employees whose contribution base rose, yes — by up to ₹1,200 a month at the top of the band — unless the employer tops up the CTC. Tell affected staff in writing before the first payslip that reflects the change.
Merik runs payroll from the attendance the month already recorded, with basic set at half of gross by default so the labour-code wages base is right before any ceiling applies. Each payslip carries basic, HRA, other allowance, incentive, overtime, professional tax, loss of pay, arrears and an other deductions line — which is where a September PF shortfall recovery goes, visibly, with its own label.
Merik does not compute PF or file the ECR. Your PF figure comes from your PF workings or your consultant; Merik carries it onto the payslip, generates every slip for the month and emails them individually or in bulk. The employee record keeps CTC history, so re-costing offers after the ceiling change is a report, not a reconstruction. See the payroll module.
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