- The Centre made all EPF contributions above Rs 15,000 voluntary under the new scheme
- Employee and employer contributions are capped at Rs 15,000 monthly wage ceiling
- Mandatory combined contribution of Rs 1,800 applies only up to the wage ceiling
The Centre has made voluntary all contributions to the Employees' Provident Fund (EPF) above the statutory wage ceiling, in a major update to India's social security scheme for formal sector workers.
Under the new Employees' Provident Funds Scheme 2026, notified by the Labour and Employment Ministry on Monday, both employee and employer contributions will be capped at the current wage limit of Rs 15,000 per month. This means the mandatory combined contribution of Rs 1,800 (12 per cent each from employee and employer) will now apply strictly to that ceiling.
Any additional contributions on basic wages exceeding Rs 15,000 will be optional for both parties.
The earlier 1952 scheme required mandatory coverage for employees earning up to Rs 15,000 a month at the time of joining. Those above the threshold could opt in voluntarily. Once enrolled, contributions were calculated on actual basic pay -- which could be higher than the ceiling -- with employers matching the employee's share.
The wage ceiling has stood at Rs 15,000 since 2014.
The new rules state that contributions "shall be limited to the contribution payable on the wage ceiling", though employers may still contribute beyond this threshold towards the pension fund in specific cases permitted under the Employees' Pension Scheme.
Employers contribute 12 per cent of wages, with employees required to match that amount.
Following an amendment to the pension scheme in 2014, the employer's 8.33 per cent contribution to the Employees' Pension Scheme was restricted to Rs 15,000 (equating to Rs 1,250 per month).
Any excess employer contribution on higher salaries previously flowed into the employee's EPF account.
