On 17 September 2026, the Ministry of Labour and Employment notified ₹25,000 a month as the wage ceiling for provident fund coverage under the Code on Social Security, 2020, a day after the Union Cabinet approved the change. The ceiling had stood at ₹15,000 since September 2014. SCC Online reports that the new limit came into force on the date of notification.
What changes
Employees earning up to ₹25,000 a month now fall under mandatory coverage of the Employees’ Provident Fund, the Employees’ Pension Scheme and the Employees’ Deposit Linked Insurance Scheme. The government expects more than 51 lakh additional employees to come in. It puts its own extra outgo at about ₹11,339 crore a year, or about ₹56,696 crore over five years.
KPMG cites the gazette notification as S.O. 5109(E). Detailed EPFO guidance on contribution mechanics was not part of the Cabinet release, so check the EPFO portal for circulars before changing payroll.
What it means for founders
For Indian startups and small firms, the main effect is on cost and take-home pay at the junior end of the team. Staff earning between ₹15,000 and ₹25,000 who were outside mandatory PF must now be enrolled, with employer contributions on top of salary. Where your payroll caps contributions at the old ₹15,000 wage base, that cap will need to move. Offer letters and cost-to-company figures quoted on the old basis may no longer hold, and contract staff supplied through agencies are affected too.
What to do now
- List every employee whose PF wages fall at or below ₹25,000 a month and check their enrolment status from 17 September 2026.
- Ask your payroll provider when the new ceiling will be applied, and how September’s part month will be handled.
- Recalculate employer cost for affected roles and tell staff before a payslip shows lower take-home pay.
- Ask contractors and staffing agencies to confirm in writing that their workers on your sites are covered.
Sources: PIB, Cabinet approves enhancement of EPFO wage ceiling; SCC Online, Labour Ministry notifies ₹25,000 wage ceiling; KPMG, India flash alert 2026-249
This is general information, not legal or tax advice.