Investment News · 25 October 2026 · 3 min read
In short: Since 17 September 2026, provident fund contributions are worked out on wages of up to ₹25,000 a month, up from ₹15,000. The Labour Ministry has now notified that the government’s own contribution to the pension scheme (EPS) will still be worked out on ₹15,000 only. So your employer’s pension contribution goes up, but the government’s stays at about ₹174 a month.
What changed
The Employees’ Pension Scheme rules said the government’s 1.16% contribution would be limited to “such sum as may be specified”. A notification (G.S.R. 890(E)) published in mid-October replaces that with “wages up to ₹15,000 per month”. It applies from 17 September 2026, the same day the wider wage ceiling rose to ₹25,000.
What goes in each month (basic pay plus DA of ₹25,000 or more)
| Contribution | Old ceiling (₹15,000) | New ceiling (₹25,000) |
|---|---|---|
| You: 12% to EPF | ₹1,800 | ₹3,000 |
| Employer: 8.33% to EPS (pension) | ₹1,250 | ₹2,083 |
| Employer: 3.67% to EPF | ₹550 | ₹917 |
| Government: 1.16% to EPS | ₹174 | ₹174 (unchanged) |
Rounded to the nearest rupee; the employer’s EPF share is its 12% minus the pension share. If your basic pay plus DA is below ₹25,000, the amounts are worked out on your actual pay.
What it means for you
- Bigger retirement savings: more money goes into your EPF and pension every month.
- Slightly lower take-home pay: if your basic pay is above ₹15,000, your own 12% deduction rises. Someone with ₹25,000 basic pay sees up to ₹1,200 more deducted each month.
- More people get a pension account: employees earning between ₹15,000 and ₹25,000 who were only in EPF must now be enrolled in EPS by their employer. You don’t need to apply.
- Possibly a higher pension later: your pension is based on your pensionable salary and years of service, so a higher wage base can mean a higher pension. People already drawing a pension do not get an automatic increase.
See how PF deductions change your monthly salary with our CTC to in-hand salary calculator.
Sources
- Upstox: Govt notifies new EPS rule capping its contribution at ₹15,000 wages
- UNI India: Centre fixes ₹15,000 wage ceiling under EPS
- SGCMS: EPFO FAQs on the ₹25,000 wage ceiling
This is a news summary for education, not investment advice. Figures are as reported on or before 25 October 2026; check official sources before making decisions.