Provident Fund

Provident Fund (PF)

The Ministry of Labour and Employment has notified the Employees' Provident Fund Scheme, 2026, replacing the Employees' Provident Fund Scheme, 1952. Effective June 29, 2026, PF administration now operates under the Code on Social Security, 2020, not the old EPF & Miscellaneous Provisions Act.

For HR and payroll teams, the 2026 framework affects contribution rules, withdrawals, contractor compliance and monthly filings. A further change took effect on 17 September 2026, when the statutory EPF wage ceiling increased from ₹15,000 to ₹25,000 per month. This article covers the earlier scheme reforms alongside the September revision and its payroll implications.

Key EPF Scheme 2026 Changes

• Revised wage ceiling: ₹25,000 per month from 17 September 2026, replacing ₹15,000.
• Contributions at the ceiling: At the standard 12% rate, employee and employer contributions are ₹3,000 each per full month.
• September transition: Calculate contributions separately for 1–16 September and 17–30 September, and report them through one September ECR.
• EPF now falls under the Code on Social Security, 2020, replacing the 1952 Act.
• Form V consolidated return due within 15 days, now also requiring Aadhaar-seeded bank account details.
• Contractor PF liability is now explicitly defined for registered and unregistered contractors.
• Voluntary Provident Fund (VPF) contributions can be started, reduced, or stopped anytime, no annual lock-in.
• Exempted PF trusts face stricter governance: dematerialised investments, annual audits, online disclosures.
• Partial withdrawals: 3 categories (down from 13), with a 25% minimum balance rule.
• Three transition schemes now open: EEC, VISHWAS 2026, and AMNESTY 2026.
• EPS 2026 replaces EPS-95, with a new 20-day pension claim settlement deadline.
• Emergency Powers: The Central Government can now defer or reduce PF contributions for up to 3 months during a pandemic, epidemic, or national disaster.

EPF Now Falls Under the Code on Social Security, 2020

This is the most significant legal change in the notification, even though it changes very little day to day. The EPF Scheme moves from the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 to the Code on Social Security, 2020.

Existing accounts, balances, UANs, and service history carry over automatically; existing members do not need to re-enrol solely because of the scheme transition. HR teams should update legal references in policy documents and offer letters and separately enrol employees newly brought into coverage by the September wage-ceiling revision.

The Code on Social Security is one of four labour codes replacing India's older employment laws. The other three are the Code on Wages, the Industrial Relations Code, and the OSH Code. Each comes with its own compliance dates and changes.

EPF Scheme 2026 is just the PF piece of the Social Security Code. If you're mapping your compliance calendar beyond PF, our guide on all four labour codes covers the rest.

Form V Consolidated Return: New 15-Day Filing Requirement

Every establishment must file a single electronic Form V consolidated return within 15 days of the scheme applying to them. The return must capture, for every employee:

• Universal Account Number (UAN)
• Aadhaar number
• PAN
• Aadhaar-seeded bank account details
• Gross wages and EPF wages

After the initial filing, monthly returns follow the same 15-day window from the close of each month. This is the first place payroll teams should check for readiness, since it depends on Aadhaar and PAN seeding being complete across your workforce. Aadhaar-seeded bank account mismatches are worth checking early, too, since they're among the most common reasons auto-settlement claims get held up.

Form V can be generated directly from the application. UAN, PAN, and Aadhaar fields go through field-level validation, and PAN-Aadhaar linkage can be verified within employee master data, catching format errors and linkage mismatches before filing.

September 2026 exception: EPFO extended the deadline for the September wage month’s ECR filing and contribution payment to 31 October 2026. This extension applies only to September 2026.

Contractor PF Liability: What Changed

The new scheme spells out contractor liability more explicitly than before:

• Unregistered contractors: If a contract worker's employer (the contractor) is not independently registered with EPFO, the principal employer is directly responsible for calculating, deducting, and depositing that worker's PF.
• Registered contractors: The contractor handles contributions, but if they default, EPFO recovers from the principal employer, who must then recover the amount from the contractor separately.

Any organisation using outsourced staffing, security, housekeeping, or contract labour should confirm registration status for every contractor on their vendor list. The review should also cover workers newly eligible under the ₹25,000 wage ceiling from 17 September 2026.

New Emergency Power: Contributions Can Be Deferred During a Crisis

A provision in EPF Scheme 2026 gives the Central Government the power to defer or reduce employer and employee PF contributions for up to 3 months during a pandemic, epidemic, or national disaster. This is a genuinely new provision, not something carried forward from October 2025.

The notification is explicit that this is an emergency mechanism, not a permanent change to contribution structure. It would only take effect if invoked during a declared crisis. There's no immediate action for payroll teams here, but it's worth knowing this power now exists, since the last time contribution relief was discussed at this scale was during COVID-19, when similar flexibility had to be introduced through separate emergency notifications rather than being built into the scheme itself.

Voluntary Provident Fund (VPF): No More Annual Lock-In

Under the old rules, once an employee opted into VPF, the contribution rate was locked for the full financial year. Mid-year changes weren't allowed.

Under EPF Scheme 2026, employees can start, increase, reduce, or stop VPF contributions at any point in the year. Employers are still not obligated to match VPF contributions, which is unchanged from before.

VPF declarations can be collected and the calculations automated in the application, so a mid-year change to an employee's VPF contribution doesn't turn into a manual payroll adjustment.

Contribution-ceiling update: ₹1,800 was the standard employee contribution on the earlier ₹15,000 ceiling. From 17 September 2026, the corresponding full-month amount is ₹3,000 at the standard 12% rate. Contributions above ₹1,800 should therefore no longer be described as automatically voluntary.

Two Existing Rules That Carry Forward Unchanged

Above-ceiling employees: Assess new entrants against the revised ₹25,000 ceiling and applicable membership conditions. Existing members generally continue in coverage when wages rise above the ceiling. Higher-wage contribution arrangements require separate consideration.

A lower 10% contribution rate continues for notified establishment categories: Certain categories of establishments notified by the Central government (typically smaller or specified establishments) continue to contribute at 10% instead of the standard 12%. This also carries forward unchanged.

Exempted PF Trusts: Stricter Governance Rules

Organisations running their own private PF trusts instead of depositing with EPFO face the biggest operational shift under the new scheme:

• Mandatory dematerialised investments
• Annual independent audits
• Online disclosures and investment reporting
• Renewal requirements for continued exemption status

If your organisation manages an exempted trust, this is the section to route to your compliance and finance teams first.

PF Withdrawal Rules 2026: 3 Categories, 25% Minimum Balance

Partial withdrawal categories have been consolidated from 13 to 3:

1. Essential Needs – illness, education, marriage
2. Housing Needs – purchase, construction, loan repayment
3. Special Circumstances – natural calamities, prolonged unemployment, other emergencies

All three require 12 months of service and carry a 25% minimum balance rule: members must always keep at least 25% of their contributions in the account during active service to safeguard their long-term retirement compounding.

Important clarification: Several articles describe this as "100% withdrawal," which has confused a lot of readers, including some of our own. Per the Ministry of Labour & Employment's own press statement (October 15, 2025), the actual mechanism is: 75% of the eligible amount is withdrawable at any time without documentation, and that withdrawable amount now includes the employer's contribution as well as the employee's contribution and interest. The remaining 25% of contributions stays in the account as a minimum balance. So the accurate message for employees is not "you can take everything," but "a minimum balance is always retained to protect your retirement corpus." Full withdrawal is allowed only under specific closure situations.

Full access to 100% of the corpus, including the protected 25%, applies on account closure, which includes: retirement after attaining age 55, permanent disability or incapacity to work, retrenchment, voluntary retirement, or permanent migration abroad. On job loss specifically, members can access up to 75% of their balance immediately upon becoming unemployed, while the remaining 25% can be withdrawn after 12 months of continuous unemployment. This is itself a change worth knowing: the waiting period for the final portion was extended from an earlier 2-month rule to 12 months, specifically to prevent erosion of retirement savings from premature full withdrawals.

A dating note for accuracy: These withdrawal modifications were approved by EPFO's Central Board of Trustees at its 238th meeting on October 13, 2025. The new EPF, EPS and EDLI Schemes 2026, which carry these reforms into the Code on Social Security 2020 framework, were approved at the 239th CBT meeting on March 2, 2026 and notified in the gazette (G.S.R. 525(E)) on June 29, 2026. If your team already updated withdrawal communication after the October 2025 announcement, those parameters still hold.

EPS 2026: What Changed for Pension

The Employees' Pension Scheme, 2026 replaces EPS-95 and the 1971 Family Pension Scheme, effective the same day. The scheme retains the following features:

• Pension formula stays the same: (Pensionable Salary × Pensionable Service) ÷ 70
• Minimum pension remains ₹1,000/month
• Existing pensioners continue without interruption

What's new is accountability on EPFO's side. Pension claims must be settled within 20 days. If a valid claim is delayed without cause, EPFO owes 12% annual interest on the delay, recovered from the responsible officer's salary.

September update: The pensionable wage ceiling increased to ₹25,000. The maximum employer EPS contribution is approximately ₹2,083 per month. Affected EPF members previously excluded from EPS must also be reviewed for enrolment from 17 September 2026, subject to applicable eligibility conditions.

Extended EPS Withdrawal Window

The waiting period to withdraw accumulated pension (EPS) components after losing a job has increased from 2 to 36 months. This works alongside the PF rule that the remaining 25% of the balance can be withdrawn only after 12 months of continuous unemployment, to prevent early drain on retirement savings.

It acts as a critical circuit breaker: Ministry data shows that 75% of members currently cash out their pension within 4 years, failing to ever reach the 10-year mark required for a lifetime pension.

There's a family-benefit angle too: if the pension fund is left unwithdrawn, the member's family stays eligible for family pension for up to 3 years after contributions stop, even in the event of the member's death. That benefit is lost the moment the pension is withdrawn early, worth mentioning to employees who might not realise the family-side implication of an early pension withdrawal.

Provident Fund (PF) Breakdown

From 17 September 2026, the statutory monthly wage ceiling is ₹25,000. At the standard 12% rate, employee and employer contributions at the ceiling are ₹3,000 each per full month, subject to the applicable scheme provisions.

Core PF Contribution Slabs & Breakdown

• Employee share: 12% of applicable PF wages.
• Employee contribution at the ceiling: ₹3,000 per full month, calculated as 12% of ₹25,000.
• Employer share: 12% of applicable PF wages.
• Employer allocation to EPS: 8.33%, subject to EPS eligibility and the revised ceiling; approximately ₹2,083 at PF wages of ₹25,000.
• Employer allocation to EPF: The balance of the employer contribution; approximately ₹917 at PF wages of ₹25,000 for an EPS-eligible member.
• Additional contributions: VPF and higher-wage contribution arrangements remain subject to their applicable conditions. The ceiling revision does not automatically reduce existing higher-wage contributions.

Key Updates under the 2026 Framework

• September wage-ceiling revision: ₹25,000 per month from 17 September 2026, under Notification S.O. 5109(E).
• Administrative Shift: Governed by the Code on Social Security, 2020 via the notified Employees’ Provident Funds Scheme, 2026, replacing the 1952 act.
• Flexible Ceiling Text: The statutory ceiling is administratively flexible for future government notification without rigid text constraints.
• Simplified Withdrawals: Merged previous complex rules into 3 streamlined categories: Essential Needs, Housing Needs, and Special Circumstances.
• Interest rate: 8.25% p.a. for FY 2025–26. Interest rates are financial-year specific; the wage-ceiling revision does not itself change the rate.

India Provident Fund (PF) Slab 2026

EPFO administers Provident Fund under the applicable Code on Social Security framework and schemes. The standard employee and employer contribution rates remain 12%, with the statutory monthly wage ceiling revised to ₹25,000 from 17 September 2026.

PF Contribution Slab 2026

Particular	PF rate or amount
Employee contribution	12% of applicable PF wages
Employer contribution	12% of applicable PF wages
Employer EPS allocation	8.33%, subject to eligibility and the EPS wage ceiling
Employer EPF allocation	Balance after EPS allocation
EPF wage ceiling	₹25,000/month from 17 September 2026
Employee contribution at the ceiling	₹3,000/month
Employer contribution at the ceiling	₹3,000/month
Combined contribution at the ceiling	₹6,000/month

These are full-month figures at the standard 12% rate. Mandatory coverage extends to eligible employees with PF wages up to ₹25,000 in covered establishments. Gross salary alone does not determine eligibility.

PF Calculation Example

For an EPS-eligible employee with monthly PF wages of ₹25,000, using the standard 12% rate:

Contribution	Rate	Monthly amount
Employee EPF	12%	₹3,000
Employer EPF	Balance after EPS allocation	Approximately ₹917
Employer EPS	8.33%	Approximately ₹2,083
Employer total	12%	₹3,000
Combined employee and employer contributions	24%	₹6,000

Amounts are rounded for illustration and exclude additional employer charges. Final remittances must follow EPFO’s rounding and filing requirements. The employer allocation differs where the employee is not eligible for EPS.

PF on Salary Above ₹25,000

Earnings above ₹25,000 do not automatically end an existing member’s coverage. Contributions above the ceiling depend on the applicable higher-wage arrangements.

For example, an employee contributing 12% on ₹30,000 contributes ₹3,600 per month. VPF is an additional employee contribution; employer matching beyond the statutory requirement depends on the applicable arrangement.

Establishment Coverage

The EPF Scheme generally covers establishments in the specified industries/classes employing 20 or more persons, subject to the applicable statutory provisions and notifications.

Certain establishments have a 10% contribution rate instead of the standard 12%, where the prescribed conditions are satisfied. EPFO lists categories such as certain establishments employing fewer than 20 employees and specified financially distressed establishments.

PF Payment Due Date

Monthly PF contributions are ordinarily payable by the 15th of the following month, subject to specific extensions.

September 2026 exception: The ECR filing and contribution-payment deadline was extended to 31 October 2026. The extension does not change the wage-ceiling revision’s effective date.

For September, calculate contributions separately for 1–16 September using the earlier ceiling and 17–30 September using the revised ceiling. Report the applicable contributions through one September ECR.

India Provident Fund Payroll Summary 2026

• Employee contribution: 12%
• Employer contribution: 12%
• Employer EPS allocation: 8.33%, subject to eligibility and the EPS wage ceiling
• Employer EPF allocation: Balance after EPS allocation
• PF wage ceiling: ₹25,000/month from 17 September 2026
• Employee contribution at the ceiling: ₹3,000/month
• Combined contribution at the ceiling: ₹6,000/month
• Regular payment deadline: 15th of the following month
• September 2026 exception: 31 October 2026

Important: PF is a central statutory contribution, so there is generally no separate state-wise PF slab such as Maharashtra PF, Karnataka PF, or Tamil Nadu PF. The applicable EPF contribution rules are determined under the central EPF legislation and EPFO regulations.

Provident Fund Slab 2026 – FAQs

1. What is the Provident Fund (PF) contribution rate in India in 2026?

The standard PF contribution rate is 12% of PF wages for the employee and 12% for the employer.

2. What is the PF wage ceiling in India for 2026?

The statutory EPF wage ceiling is ₹25,000 per month from 17 September 2026. The earlier ceiling was ₹15,000.

3. What is the employee PF contribution on ₹25,000?

At the standard 12% rate: ₹25,000 × 12% = ₹3,000 per month. This is the amount at the statutory ceiling, rather than an absolute limit on additional contributions.

4. How much does the employer contribute to PF?

The standard employer contribution is 12% of applicable PF wages. For an EPS-eligible member, 8.33% is allocated to EPS, subject to the EPS ceiling, and the balance goes to EPF. At PF wages of ₹25,000, the employer total is ₹3,000, with approximately ₹2,083 allocated to EPS and ₹917 to EPF.

5. Is PF applicable to employees earning more than ₹25,000?

Yes. Existing EPF members generally remain covered when wages exceed the ceiling, subject to applicable provisions. New entrants require a separate eligibility assessment.

6. Can PF be deducted on a salary above ₹25,000?

Yes. PF contributions can be made on higher wages in eligible cases, subject to the applicable EPFO rules and required approvals/joint requests. An employee may also make additional contributions through Voluntary Provident Fund (VPF).

7. What is VPF?

VPF (Voluntary Provident Fund) allows an employee to contribute more than the mandatory employee PF contribution. The additional contribution is made by the employee and does not require an additional employer contribution.

8. Is the employer required to contribute 12% on the employee's entire salary?

Not necessarily. Contributions depend on statutory PF wages and the applicable ceiling or higher-wage arrangement. The revised ceiling is ₹25,000 per month.

9. What is the total PF contribution if PF wages are ₹15,000?

The standard calculation is:

• Employee: ₹1,800
• Employer: ₹1,800
• Total: ₹3,600 per month

At PF wages of ₹25,000, the standard contribution is ₹3,000 each for the employee and employer, totalling ₹6,000 per month.

10. Is PF calculated on gross salary?

PF is not normally calculated on the entire gross salary. It is calculated on the wages considered for EPF purposes, generally including Basic wages + Dearness Allowance (DA) and other components covered by the applicable definition of wages.

Conclusion

From 17 September 2026, the statutory EPF wage ceiling is ₹25,000 per month. At the standard 12% rate, contributions at the ceiling are ₹3,000 each for the employee and employer per full month. Employers should update payroll calculations and enrol eligible employees under the revised coverage requirements.

InnBuilt Payroll Software automates Provident Fund membership records, employee deductions, employer contributions, and recurring calculations. HR teams can prepare accurate PF data without maintaining separate spreadsheets.

References for the September update: Government announcement: revised ceiling and contribution rates; Government clarification: revised EPS contribution ceiling;