From 17 September 2026 the monthly wage ceiling for Provident Fund contributions is ₹25,000, up from ₹15,000. It is the first change to the ceiling in years, and it lands in the middle of a payroll month. If you run payroll in ERPNext with the India Payroll app, there are a few things to check before you submit this month's salary slips.
Check the source before you act. The details below come from published coverage of Labour Ministry notification S.O. 5109(E) and from the India Payroll project on GitHub, as read on 5 October 2026. Statutory rules change, so confirm them on the EPFO website or with your accountant or compliance consultant before you file.
What Changed
- PF wage ceiling: ₹15,000 to ₹25,000 per month, effective 17 September 2026.
- Contribution rates: unchanged. Employees pay 12% and employers pay 12%, with the employer share split roughly 8.33% to the pension scheme (EPS) and 3.67% to EPF.
- ESI wage limit: unchanged at ₹21,000 gross per month.
- Newly covered staff: employees earning between ₹15,001 and ₹25,000 who were not PF members before now fall within the ceiling and may need to be enrolled.
What It Means for a Salary Slip
The employee PF deduction is 12% of PF wage, capped at the ceiling. PF wage is usually Basic plus DA, not the full gross, so check how your salary structure defines it. For someone who contributes on the ceiling, the arithmetic looks like this:
| PF wage | Employee PF at ₹15,000 ceiling | Employee PF at ₹25,000 ceiling | Change |
|---|---|---|---|
| ₹12,000 | ₹1,440 | ₹1,440 | None |
| ₹20,000 | ₹1,800 | ₹2,400 | +₹600 |
| ₹30,000 | ₹1,800 | ₹3,000 | +₹1,200 |
Employees who already contribute on their actual wage see no change in their own deduction. The change matters most for people who were capped at ₹15,000 and now are not.
September 2026 Is a Split Month
The ceiling changed on 17 September, so one pay period has two ceilings: ₹15,000 for the first 16 days and ₹25,000 for the last 14. A flat switch to either number would be wrong for September.
The India Payroll app handles this by applying each ceiling to its share of the days. For an employee with a PF wage of ₹20,000 who worked the full month, the capped wage works out as:
₹15,000 × 16/30 + ₹20,000 × 14/30 = ₹8,000 + ₹9,333.33 = ₹17,333.33
That is the example the maintainers use in their fix. An earlier version of the logic used a single day-weighted ceiling and gave a slightly different number, so it is worth confirming that you are on a release that includes the later correction.
What to Do in ERPNext This Week
- Update the India Payroll app. The ceiling lives in that app, not in core ERPNext. The maintainers have merged changes for the new ceiling and for split periods and mid-period joiners. Read the release notes for the branch you run and update to the latest.
- Test before you submit. Create draft salary slips for a few employees in each band: below ₹15,000, between ₹15,000 and ₹25,000, and above ₹25,000. Compare the PF line with a manual calculation, including a mid-month joiner.
- Check the PF register and ECR file. Open the EPF register for the month and make sure wages and contributions match the slips before you upload anything to the EPFO portal.
- Enrol newly covered employees. Anyone now inside the ceiling who was not a PF member needs a UAN and has to appear in the return. Confirm the exact rules with EPFO or your consultant.
- Tell your employees. Take-home drops for people whose PF wage rises. A short message before payday avoids a flood of questions to HR.
One Gap to Know About
An open issue on the India Payroll project (opened 30 September 2026) reports that employees who are already EPS members but whose PF wage is above the ceiling get an EPS amount of zero, and the full employer share goes to the EPF account instead. A reported workaround is editing the affected fields in the ECR text file before upload. If this describes your workforce, check the register closely and follow the issue for a fix.
If You Have Not Yet Moved Payroll Into ERPNext
A rule change like this is a good example of why statutory logic is better kept in one maintained system than in a spreadsheet. See how the pieces fit in our statutory compliance flow and payroll processing flow, or read what our ERPNext HR and payroll service covers.
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Frequently Asked Questions
The monthly PF wage ceiling has been raised from ₹15,000 to ₹25,000, effective 17 September 2026, as reported from Labour Ministry notification S.O. 5109(E). The 12% employee and 12% employer contribution rates are unchanged. Confirm the details on the EPFO website or with your compliance consultant, because this affects filings.
No. The ESI wage ceiling reported alongside this change is unchanged at ₹21,000 gross per month. ESI and PF ceilings are separate, so an employee can now fall under PF but outside ESI.
If you use the India Payroll app, yes. The ceiling is applied by that app, not by core ERPNext. The maintainers have merged changes for the new ceiling and for pay periods that straddle 17 September. Update the app to the latest release for your version and test a salary slip in each wage band before you run payroll.
The ceiling changed mid-month, so September has two ceilings: ₹15,000 for 1 to 16 September and ₹25,000 for 17 to 30 September. The India Payroll app applies each ceiling to its share of days. Check a few salary slips against a manual calculation before you submit the batch.
For employees whose PF wage is above ₹15,000 and who were contributing on the old capped amount, yes. Their 12% now applies to a higher base, up to a maximum of ₹3,000 a month. Employees who already contributed on their actual wage, and those with PF wage below ₹15,000, see no change.
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