India: Increase in Statutory Wage Ceiling for Provident Fund – 17 September 2026

Vide notification S.O. 5109(E) in the Official Gazette, the Ministry of Labour and Employment has increased the statutory wage ceiling for Employee Provident Fund purposes from INR 15,000 to INR 25,000 per month immediately effective from 17th September 2026. The ceiling is notified under clause (89) of section 2 of the Code on Social Security, 2020 (36 of 2020) and applies for the purposes of Chapter III of the Code, which governs the Employees’ Provident Fund (EPF), the Employees’ Pension Scheme (EPS) and the Employees’ Deposit Linked Insurance (EDLI) scheme.

The Union Cabinet approved the increase on 16th September 2026 and the Ministry of Labour and Employment notified it in the Official Gazette on 17th September 2026. This is the first revision of the provident fund wage ceiling since 2014.

Summary of the change

Impact on payroll

• Coverage. Employees whose wages exceed INR 15,000 but do not exceed INR 25,000 per month, previously treated as excluded employees, now fall within mandatory coverage. Employers must identify this population, generate the Universal Account Number (UAN) and complete KYC.
• Contribution base. Where contributions were restricted to the ceiling, the base moves from INR 15,000 to INR 25,000 per month, or actual wages if lower. Contributions are computed on “wages” as defined in section 2(88) of the Code on Social Security, 2020. Employers already contributing on full actual wages are not affected by the ceiling revision.
• Employer cost. For each affected employee whose contributions were capped at the previous ceiling, the employer share increases by up to INR 1,200 per month at the 12% rate, with a matching increase in the employee deduction and a corresponding reduction in net pay.
• Statutory reporting. Revised wages and contribution values must flow into the Electronic Challan cum Return (ECR) for the applicable wage month, together with the enrolment of newly covered employees.
• References. Gazette of India, Extraordinary, No. 4918 dated 17 September 2026 (CG-DL-E-17092026-276299) – https://egazette.gov.in. Cabinet decision, 16 September 2026 – https://pmindia.gov.in

Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change.

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Increase in Statutory Wage Ceiling for Provident Fund

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