What the new EPF ceiling costs your business
This estimate covers employees with PF wages above ₹15,000 whose contributions were capped at that amount. Their contribution base can rise to the lower of actual PF wages and ₹25,000. Employer cost is 12% (PF and EPS), plus 0.50% EDLI and 0.50% administrative charges, or 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 |
|---|---|---|
| For the entered group, per month | ₹48,750 | ₹65,000 |
PMVBRY incentive estimate for additional hires
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. The scheme applies to eligible jobs created from 1 August 2025 through 31 July 2027. Part B requires gross wages below ₹1,00,000 at joining and six completed wage months with contributions received.
This does not reduce the ceiling cost shown above. It applies to additional employment, not to the higher contributions on existing staff. This is a maximum estimate, not an approved benefit.
For existing establishments, EPFO derives the scheme baseline from earlier ECRs. ECRs from August 2024, or the EPFO registration date if later, through July 2025 had to be filed by 31 January 2026. A new establishment registered during the scheme period has a baseline of 20. Use the recorded scheme baseline, not today’s headcount; the entered jobs must be net additions above it.
The entered net additions are below the published minimum of 2 above the selected EPFO baseline band.
The employer rate is up to ₹1,000 per month for EPF wages up to ₹10,000 (10% of EPF wages below ₹10,000), ₹2,000 for wages above ₹10,000 through ₹20,000, and ₹3,000 above ₹20,000 where gross wages at joining are below ₹1,00,000. This calculator shows the upper bound at ₹3,000 for every entered employee; the actual amount can be lower. Sources: Ministry scheme summary and EPFO PMVBRY guidelines. Verify the scheme baseline, net additions and ECR history on the PMVBRY portal.
This estimate assumes each employee in the entered group had contributions capped at ₹15,000 before 17 September. Exclude employees whose employer already contributed on actual PF wages, since their increase may be smaller or zero. It uses one average wage for the group; separate materially different wage bands for a more precise estimate.
Frequently asked questions
Which employees increase our PF cost?
This estimate applies only to employees with PF wages above ₹15,000 whose contributions were previously capped there. Employees whose employer already contributed on actual PF wages may see a smaller or no increase. The new base is the lower of actual PF 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?
No. PMVBRY is a separate Part B incentive for net additional employment, not for the higher contributions on existing staff. The maximum is ₹3,000 per month for up to two years, or four in manufacturing, but the actual rate depends on EPF wage: up to Rs 1,000 through Rs 10,000 (proportional below Rs 10,000), Rs 2,000 above Rs 10,000 through Rs 20,000, and Rs 3,000 above Rs 20,000 for employees with gross wages below Rs 1 lakh at joining. The minimum of two or five net additions is based on the scheme baseline, which is derived from prior ECRs for existing establishments and set at 20 for a new establishment. Existing establishments had to file ECRs from August 2024, or their registration date if later, through July 2025 by 31 January 2026. Eligibility also depends on paid ECRs, qualifying first-timers or Aadhaar-authenticated re-joiners completing six months with the same employer, maintaining the average employee threshold under the scheme's monthly measurement rules, verified employer details, and no disqualifying inquiry or fraud condition. This is a maximum estimate, not an eligibility decision or approved benefit.
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.