Central Govt has enhanced the wage ceiling from Rs 15,000 to Rs 25,000 for covering employees under Provident Fund Coverage. So now all employees who receive salary (Basic+DA) upto Rs 25,000, now need to deduct PF @ 12%, which will be a maximum of upto Rs 3000. Employer’s contribution would also go up with an equal amount. The change has been brought by Notification No. SO 5109(E) dt 17-9-2026, effective from the same date.
Thus for employees whose, Basic + DA is above Rs 25,000, deduction would also be enhanced but would be limited to a maximum of Rs 25,000 limit of Basic + DA, i.e. @ Rs 3000/-.
To recap, effect after notification
- There is no change in contribution rate of 12%.
- But the now the maximum deduction and employer’s contribution will be of Rs. 3,000/- each, instead of maximum of Rs. 1,800/- earlier.
- There is no change in wages base, it is same Basic + DA
- Employees with eligible PF wages between Rs. 15,001 and Rs. 25,000 who are not currently PF members will be covered effective 17 Sept’ 2026.
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Socio Research & Reform Foundation (NGO)
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008
Currently we are paying PF on the actual basic even if it exceeds 25,000. With this enhanced PF ceiling, there are following scenarios-
1. For people with basic exceeding 25K continue paying PF on actual basic.
2. For people with basic between 15,000 & 25,000, restrict it to 3,000 without making any changes to the basic salary.
Is the above in order or we’ll have to compulsorily change the basic for people whose basic is less than 25K?