Quick answer: The Employees Provident Fund (EPF) is India’s compulsory retirement savings scheme, run by the Employees’ Provident Fund Organisation (EPFO). You and your employee each pay 12% of wages every month. Under the Code on Social Security, 2020, the mandatory wage ceiling rose from ₹15,000 to ₹25,000 a month on 17 September 2026.
- The EPF Scheme, 2026 was notified on 29 June 2026 and replaced the 1952 scheme.
- At the ₹25,000 ceiling, the employee pays ₹3,000 and you pay ₹3,000 a month.
- Deposits and the monthly ECR return are due by the 15th of the following month.
- EPF interest is 8.25% for both FY 2024-25 and FY 2025-26.
How does the PF contribution split work in 2026?
The pf contribution rate is 12% on each side, but your 12% feeds three different pots.
The employee’s share goes straight into their EPF account, while yours splits between the Employees’ Pension Scheme and EPF in a fixed ratio. You also pay for EDLI life cover and an admin charge.
| Component | Rate | Monthly cap at ₹25,000 |
|---|---|---|
| Employee EPF | 12% | ₹3,000 |
| Employer share to EPS | 8.33% | ₹2,083 |
| Employer share to EPF | 3.67% | ₹917 |
| EDLI, employer only | 0.5% | ₹125 |
| EPF admin charge, employer only | 0.5% | ₹125 |
“Wages” here means basic pay, DA and retaining allowance. If excluded allowances pass half of total pay, the 50% wage rule adds the excess back.
What does the new ceiling cost you?
Let’s say a Pune developer has PF wages of ₹40,000 and you restrict contributions to the ceiling. Before 17 September 2026, your monthly outlay was ₹1,950. It is now ₹3,250.
That is ₹15,600 more a year per employee. Take-home pay drops by ₹1,200 a month.
September 2026 was split. Days 1 to 16 ran on the old ceiling and days 17 to 30 on the new one, in a single ECR, as KPMG’s FAQ note on the ceiling explains.
What changed for EPF in 2025 and 2026?
Two things reset the scheme in 2026. The EPF Scheme, 2026 moved contributions onto the Code’s single definition of wages. Then the ceiling rose for the first time since September 2014, which the Labour Ministry’s release on the new ceiling confirms.
About 51 lakh more employees are expected to come under mandatory cover. Late deposits cost more too. Damages run at 0.25%, 0.5% or 1% a month depending on the delay, plus 12% simple interest a year.
Foreign nationals follow separate international worker rules. They contribute on full salary. Our guide to payroll compliance in India covers the full monthly calendar.
How does Remunance handle EPF for your India team?
Remunance is the legal employer through its own Indian entity, so we register your staff, file the ECR and deposit EPF by the 15th. Employer PF is passed through at cost on top of a flat fee from USD 99 per employee per month.
You can model the new ₹3,000 cap in our EOR cost calculator for India. To see what the ceiling change adds to your budget, get your PF cost recalculated by our payroll team.
What else do people ask about EPF?
What is the EPF interest rate for 2025-26?
It is 8.25%, the same as FY 2024-25, and EPFO credits it to member accounts once the government ratifies the rate. Members see it in their passbook.
Is EPF mandatory above ₹25,000 a month?
Not for a first-time joiner whose wages exceed the ceiling, whom the EPF Scheme, 2026 calls an excluded employee. The test applies when someone first becomes eligible, so a person who was a member in an earlier job usually continues. Check for an existing UAN.
Can EPF be paid on full salary?
Yes. A member can contribute on actual wages, and voluntary PF above 12% is allowed. Matching that extra is your choice.