EPFO New Rule: How much PF will now be deducted from the salaries of those earning ₹18,000, ₹20,000, and ₹25,000? Understand the full calculation.
EPFO New Rule: The Central Government has raised the EPFO wage ceiling from ₹15,000 to ₹25,000. This change could alter the PF deduction calculations for lakhs of employees. The question now is: how much money will be deposited from the employee's share each month on PF-eligible wages of ₹18,000, ₹20,000, and ₹25,000?
EPFO New Rule: The Central Government has increased the wage ceiling for mandatory coverage under the Employees' Provident Fund Organisation (EPFO) from ₹15,000 to ₹25,000 per month. The new limit is effective from September 17, 2026. This will bring more employees—those with PF-eligible monthly wages exceeding ₹15,000 and up to ₹25,000—under the ambit of mandatory EPFO coverage. They will be eligible for EPF, EPS, and EDLI benefits in accordance with applicable rules.
What was the rule earlier?
According to the PIB, the wage ceiling for mandatory EPFO coverage had been ₹15,000 per month since September 2014. Employees starting a job at an establishment with a salary exceeding this limit did not automatically fall under mandatory EPF coverage, although relevant statutory provisions still applied. Now, this limit has been raised to ₹25,000.
How much of the employee's money goes into PF?
According to official EPFO contribution-rate information, in standard cases, the employee's EPF contribution is 12% of their PF-eligible wages. The employer also contributes according to prescribed rules. The employee's share is deducted from their salary and deposited into the PF account. For certain special categories of establishments, the contribution rate may be 10%.
How much PF will be deducted on a salary of ₹18,000?
If an employee's PF-eligible monthly salary is ₹18,000 and the standard 12% contribution rate applies, the employee's monthly EPF contribution would be 12% of ₹18,000, i.e., ₹2,160. In such a case, ₹2,160 could be deducted from the employee's salary every month as the employee's share towards the PF.
How much will be deducted on a salary of ₹20,000?
If the PF-eligible salary is ₹20,000 per month, then at the 12% rate, the contribution would be 12% of ₹20,000, i.e., ₹2,400. Thus, the employee's monthly PF contribution would be ₹2,400.
How much will go into the PF on a salary of ₹25,000?
If the employee's PF-eligible monthly salary is ₹25,000 (the new maximum mandatory coverage limit), then at the standard 12% rate:
| PF-Eligible Monthly Salary | 12% Employee Contribution |
|---|---|
| ₹18,000 | ₹2,160 |
| ₹20,000 | ₹2,400 |
| ₹25,000 | ₹3,000 |
12% of ₹25,000 is ₹3,000—this represents the maximum monthly contribution calculated from the employee's share when the contribution is made at the standard 12% rate on the full PF-eligible salary of ₹25,000.
Which employees will be most directly affected?
According to the PIB, the scope of this change will extend to employees earning between ₹15,000 and ₹25,000. With the new limit, such employees will become eligible for mandatory EPFO coverage under the applicable statutory provisions. The government states that this will provide social security benefits—related to provident fund, savings, pension, and insurance—to a larger number of employees.
