September Salary to be Deducted! Here’s How PF Will Be Calculated This Time

Under the rules revised on September 17, the wage ceiling for EPF coverage has been raised from the previous ₹15,000 to ₹25,000. This will have a significant impact on in-hand salary.

Today is the last day of the month, and salaries will soon begin to be credited to accounts. However, following the new EPFO ​​(Employees' Provident Fund Organisation) rule implemented on September 17, 2026, there is confusion regarding whether the upcoming September salary will reflect a deduction. Let us explain the PF deduction calculation to you in detail.

The Central Government has raised the wage ceiling for mandatory PF coverage under the EPFO ​​from ₹15,000 to ₹25,000 per month, and this new rule came into effect on September 17, 2026. Previously, regardless of the total salary, PF was calculated based on a basic salary of only ₹15,000; the government has now increased this limit to ₹25,000.

Which employees will be affected?

This new government rule will impact employees earning between ₹15,000 and ₹25,000. Additionally, since September is being viewed as a transition phase, the PF deduction calculation may vary based on the employee's previous and new membership status. As the EPFO ​​rule changed mid-month, the contribution will be calculated on a pro-rata basis for the 14-day period. First Calculation

According to the government's new rule, PF deduction is now mandatory for individuals with a basic salary ranging from ₹15,000 to ₹25,000. Suppose an employee has a basic salary of ₹20,000 and becomes an EPFO ​​member starting September 17 under the new rules; in this case, no PF will be deducted from their salary for the period of September 1 to September 16.

Their pro-rata salary for the 14-day period from the 17th to the 30th—based on a basic salary of ₹20,000—would be ₹9,333.33. From this amount, 12% (i.e., ₹1,120) will be deducted from the employee's September salary as an EPF contribution.

On this amount, the employer's EPF contribution will be 3.67% (approximately ₹342.53), and 8.33% (₹777.47) will be allocated to the EPS. Thus, a total of ₹2,240 will be contributed towards EPF and EPS combined.

Additionally, the company will contribute 0.50% of the salary (i.e., ₹46.67) from its own pocket towards EDLI, which is a form of free government life insurance. No money is deducted from the employee's salary for this purpose.

Second Calculation

In the second scenario, consider an employee who was already a member of the Provident Fund (EPF) and had PF deducted from their salary but was not previously part of the pension scheme (EPS).

Under the government's rule making it mandatory from September 17, they are now required to join the pension scheme (EPS). Consequently, based on a basic salary of ₹20,000, their EPF contribution for the entire month at a rate of 12% would amount to ₹2,400. Since he was already a PF member, his in-hand salary remains unaffected; however, following the new rules effective from the 17th—and his subsequent inclusion in the Employees' Pension Scheme (EPS)—the company's 12% contribution (which amounted to ₹1,120) for these 14 days has been split into two parts.

The company's EPF contribution will be approximately ₹1,280 for the period of September 1–16 and around ₹342.53 for September 17–30. Meanwhile, approximately ₹777.47 will be allocated to the EPS for the period following September 17. In this scenario, the total EPF and EPS contribution for September amounts to ₹4,800 (comprising the employee's ₹2,400 and the company's contribution of ₹1,280 + ₹342.53 + ₹777.47 = ₹2,400) payable to the EPFO.

Third Calculation

The third scenario involves employees who were already members of both the Provident Fund (EPF) and the Pension Scheme (EPS). For them, the old wage ceiling of ₹15,000 applies from September 1 to 16; consequently, in accordance with the rules, their salary for these 16 days will be considered to be ₹8,000.

Meanwhile, for the period from September 17 to 30, an amount of ₹9,333.33 will be added based on the new notional basic salary of ₹20,000. Combining ₹8,000 and ₹9,333.33 results in a total of ₹17,333.33. The employee's 12% contribution on this amount will be ₹2,080; effectively, this sum will be deducted directly from the September salary. The company will also contribute a total of ₹2,080 towards your salary; however, in accordance with government regulations, this amount will be deposited into two separate accounts. Based on the 8.33% rate, the EPS (pension account) contribution will amount to ₹1,443.87 (calculated on ₹17,333.33), which will be credited to the pension account, while ₹636.13—calculated at the 3.67% rate—will go into the PF account.