Business News : After raising the EPF salary limit from Rs.15,000 to Rs.25,000, the PF contribution of employees may change. Know when the new system will be implemented, how it will affect salary and when PF deductions will appear.

What changes in EPF salary limit?

Central Govt EPFO The wage limit for compulsory coverage below has been increased from Rs.15,000 to Rs.25,000 per month. This change will be effective from September 17, 2026. This will enable employees earning between Rs 15,000 to Rs 25,000 to benefit from EPF, pension and insurance schemes, who were earlier excluded from mandatory coverage due to salary cap. The change is expected to bring about 5.1 million additional workers under Social Security coverage.

When will higher PF appear on pay slip?

After the implementation of the new wage cap, companies will have to change their payroll system and PF contribution calculation. How this change will be reflected in September pay depends on the company’s payroll process and the employee’s eligibility. If additional contributions are made since mid-September and are not deducted from that month’s pay, the employee’s share may be adjusted in the next pay cycle. However, the employer has to deposit the respective month’s contribution as per the rules.

Will ₹3,000 be deducted from each employee’s PF?

The new limit does not mean that Rs.3,000 is deducted from each employee’s account. 12% contribution will be calculated as per applicable PF wages and relevant rules. For example, if the employee’s PF salary is Rs.25,000 and full salary is applicable for contribution, the employee’s 12% share will be Rs.3,000. However, the actual deduction will depend on the employee’s eligibility, pay structure and applicable plan rules. For employees who already contribute based on their actual salary, simply increasing the salary cap may not significantly change their employee contributions.

What will be the effect on take home pay?

If an employee’s PF contribution increases, their take-home pay may decrease. On the other hand, more PF contributions can increase retirement savings. Therefore, employees should check their pay slips for employee contribution, employer contribution and applicable EPS portion.

What should employees do?

Employees can ask their HR team or pay department whether the new salary limit is applicable to their PF contribution. It will be useful to check their September and October pay slips for employee share deductions, arrears adjustments and credit to PF account.