EPF Wage Ceiling ₹25,000 vs EPS ₹15,000: What the Two Notifications Really Mean

Two notifications from the Ministry of Labour and Employment have put two different numbers in front of every HR and payroll team: ₹25,000 and ₹15,000. Many employers are asking whether one figure replaces the other. It does not. Each number does a separate job, and mixing them up can lead to wrong contribution calculations.

The two notifications at a glance

S.O. 5109(E), dated 17 September 2026. Under clause (89) of Section 2 of the Code on Social Security, 2020, the Central Government fixed ₹25,000 per month as the wage ceiling for Chapter III of the Code. This replaces the earlier ceiling notified through S.O. 2702(E) dated 29 May 2026, although anything already done under the older notification stays protected. The ceiling applies from the date of publication, 17 September 2026.

G.S.R. 890(E), dated 15 October 2026. Under Section 15(1)(b) of the Code, this notification amends Paragraph 4(2) of the Employees’ Pension Scheme, 2026. It does two things. It replaces the words “such sum as may be specified by the Central Government” with “wages upto rupees fifteen thousand per month”. It also removes the words “and the Central Government” from the first proviso. Although it was published in October, it is stated to be in force from 17 September 2026.

Why the two figures do not conflict

The ₹25,000 figure is the general wage ceiling for Chapter III. It decides the wage level up to which employees fall within the provident fund framework under the Code.

The ₹15,000 figure appears inside one specific provision of the pension scheme, the one dealing with the Central Government’s contribution. It sets the wage base for that contribution only. It is not a universal cap on all PF or pension calculations.

So a higher ceiling for EPF coverage does not automatically raise the wage base on which the Central Government contributes to the pension fund. The notification also does not prescribe a new contribution percentage. It only states the wage limit and changes the wording.

Illustration for payroll teams

The table below is illustrative. It assumes the employee is eligible for EPS and uses the commonly applied rates: 12% employee contribution, 8.33% of the employer’s share diverted to EPS, and the Central Government share at 1.16% of wages up to ₹15,000. The employer’s EPS share is shown on wages up to ₹25,000, in line with EPFO’s guidance that the revised ceiling covers EPF, EPS and EDLI.

For an employee earning above ₹25,000, the capped wage base is ₹25,000, subject to the definition of wages and the person’s membership status.

The ₹18,000 and ₹25,000 rows show the distinction clearly. Both employees are inside the ₹25,000 ceiling, yet the Central Government’s share stays tied to ₹15,000.

What employers and payroll teams should do

1. Update the PF wage ceiling to ₹25,000, effective 17 September 2026. Do not simply overwrite “15000” everywhere in an old spreadsheet or payroll rule.
2. Keep the EPS provisions separate. Map the Chapter III ceiling and the ₹15,000 limit under Paragraph 4(2) as two distinct parameters in your payroll configuration.
3. Handle the transition month carefully. The ceiling changed on 17 September, in the middle of the month. EPFO’s circulated FAQs describe a split-month approach, with the old ceiling for the first part of September and the new one after that. Confirm the method before running September contributions.
4. Review coverage for employees between ₹15,001 and ₹25,000. Employees in this band who were earlier outside mandatory coverage may now need to be enrolled.
5. Check the definition of wages. The wage base for contributions depends on the Code’s definition, so salary structures should be reviewed against it.
6. Keep an audit trail. File copies of both Gazette notifications, your payroll configuration decisions and your reconciliations, so you can explain why the two limits are applied differently.

Does G.S.R. 890(E) rewrite the whole pension scheme?

No. It amends one sub-paragraph and one proviso. The principal Employees’ Pension Scheme, 2026 (G.S.R. 527(E), dated 29 June 2026) continues to operate, and any assessment of contribution liability must look at the scheme as a whole.

Frequently Asked Questions

1. What is the new EPF wage ceiling?
The wage ceiling for Chapter III of the Code on Social Security, 2020 is ₹25,000 per month. It was notified through S.O. 5109(E) and applies from 17 September 2026, replacing the earlier ceiling of ₹15,000.

2. Which earlier notification did S.O. 5109(E) replace?
It supersedes S.O. 2702(E) dated 29 May 2026. Anything already done or omitted under the earlier notification before the supersession remains protected.

3. Will the Central Government’s EPS contribution now be calculated on ₹25,000?
No. G.S.R. 890(E) amends Paragraph 4(2) of the Employees’ Pension Scheme, 2026 so that the relevant Central Government contribution is tied to wages up to ₹15,000 per month. The higher Chapter III ceiling does not change that wage base.

4. When does G.S.R. 890(E) take effect?
It was published on 15 October 2026 but is stated to come into force on 17 September 2026, the same date as the revised wage ceiling.

5. Does G.S.R. 890(E) replace the Employees’ Pension Scheme, 2026?
No. It amends one sub-paragraph and the wording of one proviso. The rest of the scheme continues to apply, so contribution liability should be assessed against the whole scheme.

6. How should September 2026 payroll be handled, since the ceiling changed mid-month?
EPFO’s circulated FAQs describe a split-month approach: the earlier ceiling for the days before 17 September and the revised ceiling from that date. Confirm the method with the latest EPFO guidance before filing the September return.

7. Are employees earning between ₹15,001 and ₹25,000 now covered?
Employees in this band who were outside mandatory coverage only because of the old ceiling may now fall within it, subject to the other eligibility conditions and their membership status. Employers should review their employee lists.

8. What if an employee earns more than ₹25,000?
The statutory wage base is capped at ₹25,000, subject to the Code’s definition of wages and the employee’s coverage status. Contributions above the ceiling, higher-pension cases and special categories need separate treatment under the applicable scheme.

9. What should HR teams document?
Keep the Gazette copies of both notifications, your payroll configuration changes, the transition-month method and your contribution reconciliations. This lets you explain why the ₹25,000 and ₹15,000 limits are applied to different components.

Conclusion

S.O. 5109(E) answers the question “up to what wage does the Chapter III framework apply?” with ₹25,000. G.S.R. 890(E) answers a narrower question, “on what wages does the Central Government contribute under the pension scheme?”, with ₹15,000. Employers who treat these as two separate rules will avoid the most common payroll error arising from these notifications.

Disclaimer: This article is for general information only. How these notifications apply to a particular establishment or employee depends on the full Code on Social Security, 2020, the relevant schemes and any official clarifications. Consult a qualified professional before acting.