Under the revised rules, effective September 17, the wage ceiling for EPF coverage has been raised from the previous ₹15,000 to ₹25,000. This will have a significant impact on in-hand salaries.

EPFO's new rule comes into effect

Today is the last day of the month, and salaries will gradually begin to be credited to everyone's accounts. However, following the new EPFO ​​(Employees' Provident Fund Organization) rules, which came into effect on September 17, 2026, there is confusion about whether the September salary will be deducted or not. Let us explain the full calculation of PF deductions.

The central government has increased the wage ceiling for mandatory PF coverage under the Employees' Provident Fund Organization (EPFO) from ₹15,000 to ₹25,000 per month, effective September 17, 2026. This means that, regardless of your salary, PF was previously calculated based on a basic salary of ₹15,000. Now, the government has increased this limit to ₹25,000.

Which employees will be affected?

This new government rule will affect employees earning more than ₹15,000 but up to ₹25,000. Furthermore, since September is being viewed as a transition period, the calculation of PF deductions may vary depending on the employee's previous and new membership status. This EPFO ​​rule changed mid-month, so contributions will be calculated on a pro-rata basis for 14 days.

First calculation

According to the government's new rules, PF deductions will now be mandatory for those with a basic salary of ₹15,000 to ₹25,000. Suppose someone's basic salary is ₹20,000 and, according to the new rules, that employee became an EPFO ​​member on September 17th, then there will be no PF deduction on their salary from September 1st to 16th.

His proportionate salary for 14 days from 17th to 30th will be Rs 9,333.33 based on basic salary of Rs 20,000 and out of this amount, 12% i.e. Rs 1,120 will be deducted from the employee's September salary as EPF contribution.

The employer's EPF contribution on this amount will be 3.67%, or approximately ₹342.53, and 8.33%, or ₹777.47, will be added to EPS. This means a total contribution of ₹2,240 between EPF and EPS.

Additionally, the company will contribute 0.50% of the employee's salary (i.e., ₹46.67) from its own pocket towards EDLI, a form of free government life insurance. No money is deducted from the employee's salary.

Second calculation

In the second situation, if an employee is already a member of the Provident Fund (EPF) and is getting PF deducted from his salary, but he was not a part of the Pension Scheme (EPS) till now.

He is now required to join the Employee Pension Scheme (EPS) as per the government's mandatory rule from September 17. So, based on a 12% rate on his basic salary of Rs 20,000, his monthly EPF contribution will be Rs 2,400.

Since he was already a PF member, there will be no impact on his in-hand salary, but after the new rules came into effect from the 17th, now that he has come under employee pension, the company's 12% contribution (which used to be Rs 1,120) for these 14 days has been divided into two parts.

The company's EPF contribution for September 1 to 16 will be approximately ₹1,280, and for September 17 to 30, it will be approximately ₹342.53. After September 17, approximately ₹777.47 will be deposited into EPS. In this scenario, the total EPF and EPS contribution for September will be ₹4,800 (₹2,400 for the employee and ₹1,280 + ₹342.53 + ₹777.47 = ₹2,400) to the EPFO.

Third calculation

The third scenario involves employees who are already members of both the Provident Fund (EPF) and the Pension Scheme (EPS). For these employees, the old salary limit of 15,000 will apply from September 1st to 16th, so their salary will be considered only 8,000 for these 16 days, as per the rules.

Meanwhile, from September 17th to 30th, ₹9,333.33 will be added based on the new estimated basic salary of ₹20,000. Thus, ₹8,000 and ₹9,333.33 add up to ₹17,333.33. Of this, the employee's 12% contribution will be ₹2,080. This means this amount will be deducted directly from your September salary.

The company will also pay a total of ₹2,080 on your salary, but according to government rules, this money will be deposited into two separate accounts. At 8.33% in the EPS (pension account), ₹17,333.33 will become ₹1,443.87. This money will go into the pension account, and ₹636.13 will go into the PF account at 3.67%.