EPF & EPS rules under new wage ceiling: Earning Rs 20,000 and not EPS member? Know how your employer’s PF contribution will change from October 2026

Many employees who are currently members of the Employees' Provident Fund (EPF) but are not covered under the Employees' Pension Scheme (EPS) may see a change in their employer's contribution to the EPF after the wage ceiling increase from Rs 15,000 to Rs 25,000.

For employees whose basic salary is up to Rs 25,000, their employer’s contribution to the EPF will also be diverted to the EPS since they will now become members of the EPS as well.

This is particularly relevant for employees earning more than Rs 15,000 a month who were contributing to the EPF but were not part of the EPS.


Also read: EPF vs EPS vs EDLI: Earning Rs 10,000–Rs 35,000? Government reveals employee & employer’s monthly contributions from October 2026

Under the earlier rules, employees who became EPF members on or after September 2014 and were earning more than Rs 15,000 were generally not eligible to join the EPS. As a result, their full 12% (of basic pay) employee contribution and their employer's 12% contribution went towards the EPF, subject to the applicable rules.

With the wage ceiling now increased to Rs 25,000, employees were earning up to Rs 25,000 as basic pay but were not EPS members will have to mandatorily join the EPS.

EPF and EPS contribution on Rs 20,000 salary

If your EPF wages are Rs 20,000, the monthly contribution from October 2026 will be:

Contribution	Rate	Amount
Employee's EPF contribution	12%	₹2,400
Employer's contribution towards EPS	8.33%	₹1,666
Employer's contribution towards EPF	3.67%	₹734
Total	24%	₹4,800

The employee will continue to contribute 12%, or Rs 2,400, towards the EPF.

The employer will also contribute 12%, or Rs 2,400.

After the employee becomes eligible for the EPS, the employer's 12% contribution is divided between the two schemes. An 8.33% goes towards the EPS and 3.67% remains with the EPF.

The employer's contribution will be divided as follows:

An amount of Rs 1,666 towards the EPS

An amount of Rs 734 towards the EPF

Therefore, the combined employee and employer contribution remains Rs 4,800, or 24% of Rs 20,000.

What about EPF and EPS contributions for September 2026?

Since the change takes effect in the middle of the month, September will be divided into two periods for ECR calculation.

The first period will cover September 1 to September 16, comprising 16 days. The second period will cover September 17 to September 30, comprising 14 days.

The contribution calculation will depend on whether the employee is a new member, an existing member being enrolled in EPS, or an existing member whose contribution ceiling is being increased from Rs 15,000 to Rs 20,000.

What will happen if you earn Rs 20,000 as basic pay, contribute to the EPF member but are not an EPS member?

Suppose you earn Rs 20,000 per month and are currently an EPF member but are not an EPS member, you need to mandatorily take the EPS membership.

Earlier, your employer’s contribution to your EPF corpus was 12% of your basic pay. Now, the employer contribution will go towards the EPF and the EPS. As far as your contribution to your EPF corpus is concerned, it will remain at 12% of your basic pay

EPF members don’t contribute to their EPS corpus. It’s only their employers who contribute to the EPS corpus. Earlier, the employer’s EPS contribution was 8.33% of basic pay of Rs 1,250 (8.33% of Rs 15,000 wage ceiling), whichever is higher.

Now, since the wage ceiling has increased to Rs 25,000, the employer’s EPS contribution will be 8.33% of basic pay or Rs 2,083 (8.33% of Rs 25,000 wage ceiling), whichever is higher.

If your basic pay is higher than the Rs 25,000 wage ceiling and you contribute to the EPF at your actual basic, the additional EPS amount from 8.33% of basic pay will be shifted to your EPF corpus.