Summary: The Central Government revised the statutory wage ceiling for EPF, EPS and EDLI from Rs 15,000 to Rs 25,000 per month with effect from 17 September 2026 under S.O. 5109(E), issued pursuant to the Code on Social Security, 2020. The employee and employer provident-fund contribution rates continue at 12% each, while the employer’s pension allocation is ordinarily 8.33% of eligible EPS wages, capped at the applicable ceiling. For a full month from October 2026, contributions restricted to Rs 25,000 result in an employee EPF share of Rs 3,000 and an employer pension allocation of Rs 2,083, with the remaining Rs 917 credited to EPF. September 2026 requires a split-month calculation using the former Rs 15,000 ceiling for 1–16 September and the revised Rs 25,000 ceiling for 17–30 September, but one consolidated Electronic Challan-cum-Return. The article illustrates the contributions for Rs 20,000, Rs 25,000 and Rs 40,000 monthly PF wages, and addresses existing members, new EPS entrants, employees contributing above the ceiling and higher-pension arrangements. It also covers G.S.R. 847(E), the government’s separate 1.16% EPS contribution restricted to Rs 15,000 under G.S.R. 890(E), the 0.50% EDLI employer contribution and the unchanged Rs 7 lakh maximum insurance benefit. Practical payroll-system steps, ECR field requirements, FAQs and official references are included.
- EPF Wage Ceiling Raised to Rs 25,000: EPS, EDLI and September 2026 Payroll Calculations
- How the employer's 12% is split
- September 2026 is a split month
- Existing EPS members who were contributing on the Rs 15,000 cap
- Employees above the old ceiling, new joiners, and higher-pension members
- What goes in the ECR
- EDLI and the government's 1.16% share
- How payroll software should handle the split
- FAQ
- Do I file two ECRs for September 2026?
- I earn Rs 40,000 and was never in EPS. Do I now join the pension scheme?
- Does the government's 1.16% EPS contribution also move to Rs 25,000?
- Has the EDLI insurance payout gone up with the new ceiling?
- Official sources
EPF Wage Ceiling Raised to Rs 25,000: EPS, EDLI and September 2026 Payroll Calculations
From 17 September 2026, the wage ceiling for mandatory coverage under EPF, EPS and EDLI is Rs 25,000 a month. The Central Government notified this through S.O. 5109(E), under clause (89) of section 2 of the Code on Social Security, 2020. This replaces the Rs 15,000 ceiling in place since September 2014. The ceiling applies to PF wages, not gross salary. PF wages follow section 2(88) of the Code: basic pay, dearness allowance and retaining allowance, with the 50% rule for other payments.
How the employer’s 12% is split
The employee still pays 12% of EPF wages. All of it goes to the provident fund (Account 1). There is no employee contribution to EPS.
The employer also pays 12% of EPF wages. Out of this, 8.33% of EPS wages goes to EPS (Account 10). EPS wages cannot exceed the applicable statutory ceiling. The balance of the employer’s 12% goes to EPF (Account 1). When both wage figures are the same, that balance is 3.67% of those wages.
From October 2026, EPFO’s full-month figures for an EPS member, with contributions restricted to the ceiling where wages exceed it, are:
| Monthly PF wages | EPF wages | EPS wages | EDLI wages | Employee 12% | EPS 8.33% | Employer EPF 3.67% |
|---|---|---|---|---|---|---|
| Rs 20,000 | 20,000 | 20,000 | 20,000 | 2,400 | 1,666 | 734 |
| Rs 25,000 | 25,000 | 25,000 | 25,000 | 3,000 | 2,083 | 917 |
| Rs 40,000, on the ceiling | 25,000 | 25,000 | 25,000 | 3,000 | 2,083 | 917 |
The Rs 2,083 and Rs 917 figures are EPFO’s own. 8.33% of Rs 25,000 is Rs 2,082.50, taken as Rs 2,083, and the employer’s EPF share is the rest of the 12%. If PF wages are below Rs 15,000, nothing changes.
September 2026 is a split month
The new ceiling took effect mid-month. EPFO has not deferred it to 1 October 2026. For September only, work out contributions in two parts, add them, and file one ECR, ordinarily due by 15 October 2026. For 1 to 16 September (16 days) the ceiling is Rs 15,000. For 17 to 30 September (14 days) it is Rs 25,000. Wages for each part are the monthly PF wage, or that part’s ceiling if lower, times 16/30 or 14/30. EPFO illustrated the Rs 20,000 case in FAQ Q7. The Rs 25,000 and Rs 40,000 figures use the same method.
Existing EPS members who were contributing on the Rs 15,000 cap
| Monthly PF wages | 1-16 Sep | 17-30 Sep | Sep EPF / EPS / EDLI wages | Employee share | EPS share | Employer EPF share |
|---|---|---|---|---|---|---|
| Rs 20,000 | 8,000.00 (15,000 x 16/30) | 9,333.33 (20,000 x 14/30) | 17,333.33 | 2,080.00 | 1,443.87 | 636.13 |
| Rs 25,000 | 8,000.00 (15,000 x 16/30) | 11,666.67 (25,000 x 14/30) | 19,666.67 | 2,360.00 | 1,638.23 | 721.77 |
| Rs 40,000, on the ceiling | 8,000.00 (15,000 x 16/30) | 11,666.67 (25,000 x 14/30) | 19,666.67 | 2,360.00 | 1,638.23 | 721.77 |
The Rs 20,000 row is EPFO’s Scenario C. The other two rows match because both hit the ceiling in each part of the month. EDLI at 0.50% on those September wages is Rs 86.67, Rs 98.33 and Rs 98.33.
An excluded employee at Rs 20,000, joining only from 17 September, has employee share Rs 1,120.00, EPS share Rs 777.47 and employer EPF share Rs 342.53. An EPF member already contributing on actual wages of Rs 20,000, enrolled in EPS from 17 September, keeps employee share Rs 2,400.00; EPS share is Rs 777.47 and employer EPF share is Rs 1,622.53. If a newly covered employee’s share could not be deducted in September, EPFO has allowed recovery from the October salary. The September remittance is still due by 15 October 2026.
Employees above the old ceiling, new joiners, and higher-pension members
If a Rs 40,000 EPS member already pays EPF on actual wages, the employee share stays Rs 4,800. The 24% total does not change. From October the EPS share rises from Rs 1,250 to Rs 2,083, and the employer’s EPF share falls from Rs 3,550 to Rs 2,717. For September, EPF wages stay Rs 40,000 and EPS wages are Rs 19,666.67, so the EPS share is Rs 1,638.23 and the employer’s EPF share is Rs 3,161.77.
Some members already have a higher-pension or joint-option arrangement, with EPS paid on wages above the ordinary ceiling. The ceiling FAQs do not give a worked example for them. They do say that an existing higher-wage arrangement is not automatically cut down to Rs 25,000. Until EPFO issues a specific note, leave those members on their current option terms.
What goes in the ECR
The ECR text-file layout did not change. It is still one line per member, no header, and 11 fields separated by #~#: UAN, member name, gross wages, EPF wages, EPS wages, EDLI wages, employee share, EPS share, employer EPF share (the EPF minus EPS difference), NCP days, and refund of advances. File one September ECR with the two periods added together. From October, the same fields take full-month amounts under the Rs 25,000 ceiling.
EDLI and the government’s 1.16% share
S.O. 5109(E) covers EDLI as well, because it sets the wage ceiling for Chapter III of the Code. The employer pays 0.50% of EDLI wages, now capped at Rs 25,000, so Rs 125 a month at the cap against Rs 75 earlier, and 0.50% of the split-month EDLI wages in September. The insurance payout itself remains Rs 7 lakh. A mathematical figure of Rs 10.5 lakh at a wage of Rs 25,000 does not raise that cap.
The Central Government’s EPS contribution stays 1.16% of wages up to Rs 15,000 a month, or Rs 174 per member. G.S.R. 890(E) dated 15 October 2026, effective 17 September 2026, writes this into Paragraph 4(2) of the Employees’ Pension Scheme, 2026. EPFO has said this does not reduce the member’s pension.
How payroll software should handle the split
For each employee, the software has to know whether the person was in EPF and in EPS on 16 September 2026, whether contributions were on the cap or on actual wages, and what the PF wages were. It then has to compute September in two periods, write one ECR line, and from October apply the Rs 25,000 ceiling. The EPF and EPS split has to follow each person’s membership.
EngageHRMS (hrengage.ai) does this on one employee record. PF, ESI, professional tax and TDS are calculated from the attendance on that record. The PF ECR, the challans, the payslips and the bank transfer file come from the same run. Employees can see their own payslips and claims in self-service.
FAQ
Do I file two ECRs for September 2026?
No. File one ECR, with the two periods added together, ordinarily by 15 October 2026.
I earn Rs 40,000 and was never in EPS. Do I now join the pension scheme?
Not on a mandatory basis, if your PF wages on 17 September 2026 were above Rs 25,000.
Does the government’s 1.16% EPS contribution also move to Rs 25,000?
No. It stays limited to wages of Rs 15,000 a month, or Rs 174 per member. This does not, by itself, change the member’s pension.
Has the EDLI insurance payout gone up with the new ceiling?
No. The contribution is now 0.50% on wages up to Rs 25,000, but the maximum benefit remains Rs 7 lakh.
Official sources
- Ministry of Labour and Employment, S.O. 5109(E) dated 17 September 2026: https://www.labour.gov.in/static/uploads/2026/09/2b0f1dbbd3769fc388416186ec145328.pdf
- Ministry of Labour and Employment, G.S.R. 847(E) dated 25 September 2026, inserting Paragraph 7(1)(iii) in the Employees’ Pension Scheme, 2026, with effect from 17 September 2026.
- Ministry of Labour and Employment, G.S.R. 890(E) dated 15 October 2026, limiting the Central Government’s EPS contribution to wages up to Rs 15,000 a month, with effect from 17 September 2026.
- EPFO, Frequently Asked Questions on Revision of the EPFO Statutory Wage Ceiling from Rs 15,000 to Rs 25,000, on the EPFO employer portal (Q7, Q8, Q9, Q12, Q13, Q22, Q28, Q29, Q37, Q38 and Q45).
- Press Information Bureau, release on the wage-ceiling revision, including the maximum employer EPS contribution of Rs 2,083 a month: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2314111
Mannu Matta works at EngageHRMS an Indian HR and payroll software company in Gurgaon.
