Provident Fund

Last updated: August 25, 2026

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, this touches on contribution rules, withdrawal categories, contractor liability, and monthly filing requirements. Some of these changes took effect this week. Others were decided back in October 2025 and are only now being widely reported. Here's what you need to know and what to update in your payroll process.

Key EPF Scheme 2026 Changes

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. No action is required from employees, and no re-enrolment is needed. For HR teams, the practical impact is limited to updated legal references in policy documents and offer letters that cite the old Act by name.

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.

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.

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.

Note: Several reports have described the ₹1,800 mandatory contribution cap and the option to contribute voluntarily above it as a new feature of this scheme. It isn't. That structure has existed since the ₹15,000 wage ceiling was last revised in September 2014. The genuinely new part is the flexibility to adjust VPF mid-year.

Two Existing Rules That Carry Forward Unchanged

Above-ceiling employees still need to opt in: Employees earning above the statutory wage ceiling at the time of joining remain outside mandatory EPF coverage unless both the employer and employee jointly opt for coverage. This isn't a new rule introduced by EPF Scheme 2026, it's a continuation of a provision that already existed under the 1952 scheme. If your organisation hires above-ceiling employees, this is worth double-checking against your own onboarding paperwork rather than assuming it changed.

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:

Essential Needs – illness, education, marriage
Housing Needs – purchase, construction, loan repayment
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. For most members, nothing changes:

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.

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

Under the EPF Scheme 2026 effective June 29, 2026, the statutory wage ceiling remains anchored at ₹15,000 per month. The mandatory PF contribution is 12% of basic salary plus dearness allowance, capped at ₹1,800 per month each for employee and employer, with any higher contribution on basic pay above the ceiling treated as voluntary.

Core PF Contribution Slabs & Breakdown

Employee Share: 12% of basic salary + dearness allowance (DA).
Mandatory minimum/ceiling cap: ₹1,800 per month (12% of ₹15,000).
Contributions above ₹1,800: Fully voluntary for the employee, even if basic salary is higher than ₹15,000.
Employer Share: Total 12% of basic salary + DA.
- To Employee Pension Scheme (EPS): 8.33% (capped at ₹1,250/month based on the ₹15,000 wage limit).
- To Provident Fund (EPF): Balance 3.67%.
Voluntary status: Employers are not legally obligated to match voluntary employee contributions exceeding the statutory wage ceiling.

Key Updates under the 2026 Framework

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.
Current Interest Rate: Standing at 8.25% p.a. for the financial period.

India Provident Fund (PF) Slab 2026

For India, Provident Fund (PF) is governed by the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 and administered by EPFO. The standard PF contribution rates remain 12% for the employee and 12% for the employer, subject to the statutory wage ceiling and applicable rules.

PF Contribution Slab 2026

Particular	PF Rate 2026
Employee contribution	12% of PF wages
Employer contribution	12% of PF wages
Employer's EPF share	3.67%
Employer's EPS share	8.33%
EPF wage ceiling	₹15,000/month
Employee maximum PF contribution on ceiling	₹1,800/month
Employer contribution on ₹15,000	₹1,800/month
Total employee + employer	₹3,600/month

EPFO states that employees earning ₹15,000 per month or less in PF wages are mandatorily covered in applicable establishments. Employees earning above ₹15,000 can also become PF members voluntarily subject to the applicable provisions.

PF Calculation Example

If an employee's Basic + DA = ₹15,000 per month:

Contribution	Rate	Amount
Employee EPF	12%	₹1,800
Employer EPF	3.67%	₹550.50
Employer EPS	8.33%	₹1,249.50
Employer total	12%	₹1,800
Total PF-related contribution	24%	₹3,600

The employer's 12% share is divided between EPF (3.67%) and EPS (8.33%), subject to the applicable EPS rules.

PF on Salary Above ₹15,000

The ₹15,000 wage ceiling does not mean that employees earning above ₹15,000 can never have PF deducted.

An employee can contribute more than 12% as Voluntary Provident Fund (VPF). EPFO also permits contribution on wages above ₹15,000 in applicable cases, subject to the required joint request and applicable conditions.

For example, if PF is voluntarily calculated on ₹30,000:

Employee PF at 12% = ₹3,600
Employer contribution may remain restricted to the statutory ceiling unless the employer agrees to contribution on higher wages under the applicable rules.

Establishment Coverage

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

Employers are required to deposit monthly PF contributions through the EPFO ECR system. EPFO's employer information booklet specifies that monthly contribution is to be paid on or before the 15th of every month.

India Provident Fund Payroll Summary 2026

Employee contribution: 12%
Employer contribution: 12%
Employer EPF: 3.67%
Employer EPS: 8.33%
PF wage ceiling: ₹15,000/month
Maximum employee contribution on ceiling: ₹1,800/month
Standard combined contribution: ₹3,600/month
Payment due date: 15th of the following month

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 ₹15,000 per month for mandatory coverage purposes.

3. What is the maximum employee PF contribution of ₹15,000?

At 12%, the employee contribution is: ₹15,000 × 12% = ₹1,800 per month.

4. How much does the employer contribute to PF?

The standard employer contribution is 12% of PF wages. Generally, the employer's share is divided as:

3.67% → EPF
8.33% → EPS, subject to applicable EPS rules.

5. Is PF applicable to employees earning more than ₹15,000?

Yes. Earning more than ₹15,000 does not automatically mean that PF cannot apply. Employees who are already EPF members generally continue to be covered, subject to the applicable provisions.

6. Can PF be deducted on a salary above ₹15,000?

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. The statutory contribution is generally subject to the ₹15,000 monthly wage ceiling, unless higher-wage contribution is applicable under the EPF rules and the employer/employee has opted for it where permitted.

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

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

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