What the new EPF ceiling costs your business
Only employees earning above ₹15,000 are affected. For them the contribution base moves from ₹15,000 to the lower of actual wages and ₹25,000. Employer cost is 12% (PF and EPS) plus 0.50% EDLI plus 0.50% administrative charges — 12% in total on that base.
Extra cost per month
₹16,250
Extra cost per year
₹1,95,000
Per affected employee
₹650
per month
| Employer outgo | Before 17 Sep 2026 | After |
|---|---|---|
| On affected employees, per month | ₹48,750 | ₹65,000 |
| Whole workforce, per month | — | ₹91,000 |
The PMVBRY offset — what it does and does not cover
The government has linked an incentive of up to ₹3,000 per month per additional employment created under the PMVBRY scheme — for up to two years in non-manufacturing establishments and four years in manufacturing.
This is not a subsidy of the ceiling increase. It applies to new jobs created, not to the higher contributions now payable on existing staff. We report it separately rather than netting it off, because treating it as an offset would overstate the relief.
Assumes employees above the old ceiling were contributing on the capped ₹15,000 rather than on actual wages. Where an employer already contributed on full wages, the increase is smaller or nil. Averages are used — enter a band-by-band breakdown for a precise figure.
Frequently asked questions
Which employees increase our PF cost?
Only those earning above ₹15,000 a month. For employees at or below that figure nothing changes. For everyone above it, the contribution base moves from ₹15,000 to the lower of actual wages and ₹25,000.
What is the total employer rate?
12% towards PF and EPS, plus 0.50% EDLI and 0.50% administrative charges — about 13% on the contribution base.
Does the PMVBRY incentive offset this cost?
Not against this cost. PMVBRY provides up to ₹3,000 per month per ADDITIONAL employment created, for up to two years (non-manufacturing) or four years (manufacturing). It rewards new hiring; it does not subsidise the higher contributions now payable on existing staff. We report it separately rather than netting it off.
We already contributed on full wages, not the ceiling. Are we affected?
Barely or not at all. The increase arises only where contributions were previously restricted to the ₹15,000 ceiling. Where you already contributed on actual wages, your base may already exceed the new ceiling.