Will the PF contribution be fixed at ₹1,800? What are the PF contribution rules under the new EPF scheme for 2026?

Under the new EPF rules, a monthly cap of ₹1,800 may be set for an employee's Provident Fund (PF) contribution, even if the amount calculated as 12% of the basic salary and Dearness Allowance (DA) exceeds this figure. A similar cap may also apply to the employer's contribution. Employees opting for a lower contribution could see an increase in their monthly take-home pay, while those saving for the long term can choose to continue contributing higher amounts to the PF.

This guideline explains the calculation of the new EPF contribution cap and outlines the options available to employees.

What has changed regarding the EPF contribution cap?
For many employees, EPF deductions are determined by applying a 12% contribution rate to their basic salary and DA; employers contribute an equal amount based on the same calculation. For instance, if the combined monthly basic salary and DA is ₹50,000, the employee previously contributed ₹6,000 to the EPF, and the employer contributed an equal ₹6,000, resulting in a total monthly deposit of ₹12,000. Under the new rules, a different basis has been established for mandatory contributions. Instead of applying the 12% rate to the entire basic salary and DA, a statutory wage ceiling is used for the mandatory calculation.

The current ceiling set by the government is ₹15,000 per month. Applying the 12% contribution rate to this amount results in a figure of ₹1,800. Consequently, the mandatory EPF contribution is capped at ₹1,800 per month for the employee and ₹1,800 per month for the employer.

This ₹1,800 limit may not be new to employees and employers who are already familiar with the EPF system. Even under the earlier rules, a joint written request was required when calculating PF contributions on a salary exceeding the statutory limit.

Recent changes have further clarified this situation. By clearly outlining contribution limits and mandatory documentation, these rules provide payroll departments with a clear basis for the EPF deduction process.

Disclaimer: This content has been sourced and edited from Money Control. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content