Increase in wage ceiling for applicability of EPF

The Ministry of Labour and Employment, vide a Gazette Notification dated September 17, 2026, has notified INR 25,000 per month as the statutory wage ceiling for mandatory coverage under Chapter III of the Code on Social Security, 2020. The revised ceiling accordingly replaces the INR 15,000 ceiling that had been in force since September 2014. The increment in the wage ceiling is expected to expand the mandatory EPFO coverage to an additional fifty-one lakh employees.

The Employees’ State Insurance Corporation (ESIC) wage ceiling of Rs. 21,000 remains unchanged.

Applicability to NPOs

Employees’ Provident Fund (EPF) is a social security legislation and is mandatory for all non-profit organizations or charitable institutions in India once they reach the threshold of twenty or more employees.

Date of effectiveness

Effective 17^th September 2026

Impact

Employees whose contributions are currently restricted to the existing statutory ceiling, will see a reduction in their monthly take-home pay, while also receiving the benefit of a higher contribution towards their retirement and social security corpus.

For employers, the increase in the ceiling is likely to result in an increase in statutory employment costs for employees who become mandatorily covered as a result of the revised threshold, as well as for employees already covered whose contributions are presently restricted to the statutory ceiling.

Impact on employees

Employees will see an increase the monthly employee contribution at 12% from INR 1,800 to INR 3,000, with a corresponding increase in the employer’s contribution, subject to the applicable allocation between EPF and EPS and other applicable requirements.

Impact for employers

Maximum employer share to:

1. Employees’ Pension Scheme (EPS) @ 8.33% from Rs. 1,250 to Rs. 2,083 and
2. share to Employees’ Provident Fund (EPF) @ 3.67% from Rs. 550 to Rs. 917 (Total employer EPF + EPS contribution @12% from 1800 to Rs. 3,000)
3. Employees’ Deposit-Linked Insurance (EDLI) Scheme @0.50% capped at ceiling from Rs. 75 to Rs. 125
4. Admin charges @0.50% from Rs. 75 to Rs. 125