EPF Contribution: The EPFO ​​has raised the PF salary limit from ₹15,000 to ₹25,000. The new rule came into effect on September 17, 2026. Calculations for September will be based on a mix of the old and new rules, while the full impact of the new system will be visible from October onwards.

This change will particularly affect employees whose basic salary (considered for PF purposes) falls between ₹15,000 and ₹25,000. Such employees may see an increase in their PF contribution, which means their take-home salary could decrease slightly.

How much PF will be deducted on a PF salary of ₹20,000?

Suppose your PF salary is ₹20,000. From October, the employee's contribution at a rate of 12% will amount to ₹2,400. Previously, due to the ₹15,000 limit, this contribution was ₹1,800. This means an additional ₹600 will now go towards PF every month.

The employer will also contribute ₹2,400. However, the entire amount will not go into the EPF; ₹1,666 of this will go into the EPS (Pension Scheme), and the remaining ₹734 will be deposited into the EPF account.

Contribution | Old System | From October 2026
--- | --- | ---
Employee's EPF contribution | ₹1,800 | ₹2,400
Employer's EPS contribution | ₹1,250 | ₹1,666
Employer's EPF contribution | ₹550 | ₹734
Employer's total contribution | ₹1,800 | ₹2,400
Total Employee + Employer contribution | ₹3,600 | ₹4,800

Thus, for an employee with a PF salary of ₹20,000, a total of ₹4,800 will go into PF every month. Previously, this amount was ₹3,600.

Will existing employees also be affected?

Yes, some existing EPF members will also be affected—specifically those who were already part of the EPF but were not included in the EPS because their PF salary exceeded the old limit of ₹15,000.

According to the EPFO, an employee with a PF salary of ₹20,000 can become an EPS member under the new system. Consequently, the employer's contribution will be split between the EPF and the EPS.

PF deductions will not be based on ₹25,000 for every employee.

It is important to understand a key point here: ₹25,000 is the new salary limit. This does not mean that PF deductions for every employee will be calculated based on ₹25,000. If an employee's PF salary is less than ₹25,000, the contribution will be based on that specific salary amount. Also, PF salary and gross salary are not always the same.

According to an example provided by the EPFO ​​for the month of October, an employee's contribution would be ₹1,200 on a PF salary of ₹10,000; ₹2,400 on ₹20,000; and ₹3,000 on ₹25,000.

What is the impact on take-home salary?

For an employee with a PF salary of ₹20,000, the contribution will rise from ₹1,800 to ₹2,400. This means an additional ₹600 will be deposited into the PF account each month. This could directly impact take-home salary; however, the actual effect will depend on your salary structure and current PF arrangement.

Another aspect of this change is that more money will be accumulated in the employee's PF account. In the long run, this could increase the total corpus accumulated for retirement. The company's contribution will not be deducted from the employee's salary.

The EPFO ​​has also clarified that the contributions made by the employee and the employer (the company) are distinct. The employer's contribution cannot be deducted from the employee's salary.

This means ₹2,400 will be contributed from the employee's share. Additionally, the employer will contribute ₹2,400. Thus, starting in October, a total of ₹4,800 will go towards EPF and EPS on a PF-eligible salary of ₹20,000.

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