What is the new EPF wage ceiling?

₹25,000 a month from 17 September 2026, raised from ₹15,000 by a Cabinet decision of 16 September 2026.

How much of the employer's 12% goes to EPS?

8.33% of wages up to the ceiling: up to about ₹2,083 a month from 17 September 2026 (8.33% of ₹25,000), up from ₹1,250. The rest of the 12% goes to your EPF account.

Does the new ceiling start in September or October 2026?

It took effect on 17 September 2026. September wages are split between the old and new ceilings, and October is the first full month at ₹25,000, which is why some reports say October.

Will my take-home pay fall because of the new ceiling?

Only if your employer restricts PF to the statutory ceiling and your basic + DA is above ₹15,000. In that case your own PF can rise by up to ₹1,200 a month.

Is EPF withdrawal taxable?

Not after five years of continuous service. Withdrawals before that are generally taxable, and TDS may apply.

Who must be enrolled in EPF?

Employees of covered establishments who earn up to ₹25,000 a month when they join. Those earning more can join if the employer agrees.

EPF explained

Updated 11 October 2026

The Employees' Provident Fund (EPF) is a compulsory retirement savings scheme for salaried workers, run by the Employees' Provident Fund Organisation (EPFO). You contribute 12% of basic pay + DA and your employer adds another 12%, part of which goes into the Employees' Pension Scheme (EPS). From 17 September 2026 the statutory wage ceiling for EPF is ₹25,000 a month, up from ₹15,000.

How contributions are split

Contribution	Rate	Goes to
Employee	12% of basic + DA	Your EPF account
Employer	8.33% of wages, up to the EPS wage limit	Employees' Pension Scheme (EPS)
Employer	The rest of the 12%	Your EPF account
Employer (extra)	0.5% EDLI + 0.5% admin charges	Insurance cover and EPFO costs

"Wages" for PF means basic pay + DA + retaining allowance. HRA, bonus and overtime are not included. Under the labour codes, though, excluded allowances above 50% of total pay are added back to wages. See labour codes and your salary.

The new ₹25,000 wage ceiling

On 16 September 2026 the Union Cabinet raised the EPF wage ceiling from ₹15,000 to ₹25,000 a month. It was notified the next day (S.O. 5109(E) under the Code on Social Security, 2020) and took effect on 17 September 2026. Reports estimate that about 51 lakh more workers come under compulsory coverage.
Compulsory coverage: employees earning up to ₹25,000 a month when they join must now be enrolled. Earlier the limit was ₹15,000.
Contributions: employers who restrict PF to the statutory ceiling now calculate it on wages up to ₹25,000 instead of ₹15,000. Employers who already pay PF on full basic pay are not affected.
EPS: the pension limit moved too. The employer's EPS share is now 8.33% of wages up to ₹25,000, so its cap rose from ₹1,250 to about ₹2,083 a month, as PIB confirmed. EDLI insurance cover is worked out on the higher ceiling as well.
September 2026 is split: as reported from EPFO's guidance, wages for 1 to 16 September count at the old ₹15,000 ceiling and 17 to 30 September at ₹25,000, in one return due by 15 October. Employers may recover the employee's extra share for September in October's payroll, and October is the first full month at ₹25,000. That is why some reports say the change starts in October.

Official updates are on the EPFO website and PIB.

Worked example

Worked example. Basic + DA is ₹32,000 a month, and the employer pays PF only on the statutory ceiling. Before 17 September 2026: employee PF = 12% × ₹15,000 = ₹1,800; employer PF = ₹1,800, of which EPS = ₹1,250 and EPF = ₹550. From 17 September 2026: employee PF = 12% × ₹25,000 = ₹3,000, so take-home falls by ₹1,200 a month. Employer PF = ₹3,000, of which EPS = 8.33% × ₹25,000 = ₹2,083 and EPF = ₹917. In all, ₹6,000 a month now goes into your retirement savings instead of ₹3,600. Had the employer paid PF on the full ₹32,000, each side would be 12% × ₹32,000 = ₹3,840, and nothing would change.

How EPS pension works

EPS pays a monthly pension from age 58 if you have at least 10 years of membership. The formula is pensionable salary × pensionable service ÷ 70, where pensionable salary is the average of the last 60 months' wages, capped at the EPS wage limit. With the ₹15,000 cap and 35 years of service, the pension is ₹15,000 × 35 ÷ 70 = ₹7,500 a month. The minimum EPS pension is ₹1,000 a month. Service from 17 September 2026 counts at the ₹25,000 limit; see EPS pension and the higher pension option for how older service is counted.

Interest, transfers and withdrawals

Interest is declared every year by the EPFO's Central Board of Trustees and credited to your account. Check your passbook on the EPFO member portal.
UAN: your Universal Account Number stays with you across jobs, so link it with Aadhaar, PAN and your bank account and transfer old balances when you change employer.
Withdrawals: partial withdrawals are allowed for purposes such as housing, medical treatment, education and marriage, and the full balance can be withdrawn on retirement or after a period of unemployment, subject to EPFO rules.
VPF: you can contribute more than 12% as Voluntary Provident Fund. It earns the same interest, but the employer does not match it.

How EPF is taxed

Your contribution qualifies for the section 80C deduction (section 123 of the Income-tax Act, 2025) in the old regime, within ₹1,50,000. There is no deduction in the new regime.
Employer contribution is not taxed, unless the employer's total contributions to PF, NPS and superannuation exceed ₹7.5 lakh in a year.
Interest is tax-free, except interest on your own contributions above ₹2.5 lakh a year (₹5 lakh where the employer does not contribute).
Withdrawal is tax-free after five years of continuous service. Earlier withdrawals are taxable, with TDS in many cases.

See section 80C for the full list of old-regime deductions and the salary calculator to see PF in your take-home pay.