Any contribution beyond that amount will now depend on voluntary agreement between both sides.
The change comes under the Employees’ Provident Funds Scheme, 2026 notified under the Code on Social Security, 2020, replacing the older EPF Scheme, 1952.
So what exactly changes?
Under the earlier system, the ₹15,000 wage ceiling mainly determined whether an employee had to be mandatorily brought under EPFO coverage.
However, once employees became part of the provident fund system, many companies continued calculating PF contributions on actual basic salaries, even when wages were far above ₹15,000. Employers matched those higher contributions, resulting in larger monthly PF deposits.
For instance, an employee earning a basic salary of ₹50,000 could still receive provident fund contributions calculated on the full salary instead of the statutory ceiling.
The new EPF Scheme 2026 changes that structure more explicitly.
The notified rules state that contributions payable for a member will be subject to the wage ceiling notified by the Central Government. Where wages exceed the ceiling, both employer and employee contributions “shall be limited” to the contribution payable on the wage ceiling amount.
At the current ceiling of ₹15,000, that mandatory contribution works out to ₹1,800 each from employer and employee.
Does this mean higher PF contributions stop?
Not necessarily.
The new framework still allows employers and employees to voluntarily contribute on salaries above the wage ceiling if both sides agree. Employees can also choose to make higher voluntary provident fund contributions beyond the mandatory limit.
In effect, the scheme does not prohibit higher PF contributions, but it removes the assumption that contributions on actual higher salaries automatically continue once an employee is covered under EPFO.
Why this matters
The change could have long-term implications for salaried employees whose retirement savings currently benefit from PF contributions calculated on full salaries instead of the statutory ceiling.
If companies move toward limiting contributions to the mandatory ₹1,800 threshold, monthly provident fund accumulation for some employees may reduce substantially compared to existing practices.
For employers, however, the revised structure could help standardise payroll compliance and lower provident fund liabilities linked to high-salaried employees.
The move also aligns with the government’s broader push to simplify and digitise social security administration under the labour codes framework.
So far, the Labour Ministry has not issued a detailed clarification on whether existing employees already contributing on higher salaries will automatically continue under the earlier structure or require fresh consent arrangements.
