The Provident Fund (PF) deducted monthly from the salaries of employed individuals is set to impact the savings and take-home pay of many more employees. The central government has raised the salary threshold for mandatory coverage under the Employees' Provident Fund Organisation (EPFO) from ₹15,000 to ₹25,000, effective September 17, 2026. This means that eligible employees who were previously outside the scope of the EPF due to the salary limit may now fall under its ambit. According to the government, this change is expected to benefit approximately 5.1 million (51 lakh) additional employees.

How much PF will be deducted on a salary of ₹15,000?
Calculation    Amount
Monthly Salary    ₹15,000
Employee’s PF (12%)    ₹1,800
Take-home Amount    ₹13,200
Employee’s Annual PF    ₹21,600

If an employee’s "eligible salary" for PF—comprising their basic salary and Dearness Allowance (DA)—is ₹15,000, then 12% of this amount, or ₹1,800, will be deducted as PF every month. In this scenario, if the total salary is also ₹15,000 and there are no other deductions, the employee’s take-home pay will be ₹13,200.

The company also contributes
It is not just the employee who contributes to the PF; the company also contributes its share. Under standard rules, the employer’s contribution is also 12% of the eligible salary. As per applicable regulations, 8.33% of this amount is allocated to the Employees' Pension Scheme (EPS), while the remainder is deposited into the EPF account. For an eligible salary of ₹15,000, the company’s standard contribution would also be ₹1,800. Of this, approximately ₹1,250 would go into the EPS, and the remaining ~₹550 would go into the EPF, assuming standard rates and pension-related rules apply.

Will employees fall under the old threshold or the new one? Prior to September 17, 2026, the wage ceiling for mandatory coverage was ₹15,000. It has now been increased to ₹25,000. Consequently, an employee with a salary exceeding ₹15,000—up to a limit of ₹25,000—may now fall under the scope of mandatory EPF coverage. Different rules may apply to employees who are already PF members, and their membership does not cease simply due to an increase in their salary.

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