The Ministry of Labor makes EPF contributions above ₹1,800 voluntary

The New Employees’ Pension Fund Scheme 2026 provides that “the contribution payable per member shall be subject to the wage limit notified by the Central Government from time to time”. Photo: epfo.gov.in

The Ministry of Labor and Employment has made all Employees’ Pension Fund (EPF) contributions above the monthly wage ceiling of ₹15,000, which is more than ₹1,800, voluntary under the new Employees’ Pension Fund Scheme 2026 announced on 29 June 2026.

Earlier, under the old scheme, the Employees’ Provident Fund Scheme of 1952, the salary ceiling, which is currently ₹15,000 per month, was relevant at the time of joining the company for providing compulsory social security to employees.

All employees whose basic salary was up to ₹15,000 were compulsorily included in this scheme and others were given the option to voluntarily join the social security schemes run by the Employees’ Provident Fund Organization (EPFO).

Once enrolled in the scheme, employees contributed from their actual basic wages and employers used this contribution, which was even higher than the wage cap announced by the government from time to time.

The current salary cap of ₹15,000 was announced in 2014.

The New Employees’ Pension Fund Scheme 2026 provides that “the contribution payable in respect of a member shall be subject to the wage limit notified by the Central Government from time to time.

“…Subject to the provisions contained in subsection (4) of paragraph 9, if such member’s monthly salary exceeds the wage ceiling, the contributions of the employer and the employee shall be limited to the contribution payable up to the “wage ceiling”.

Provided that the employer may make such contribution on wages in excess of the wage ceiling to the pension fund in such cases as have been allowed for contribution on higher wages under the Employees’ Pension Scheme, 1995, it is also stated.

However, it states that the employer’s contribution under this scheme is 12% of the wages payable to the employee covered by the scheme and the employee’s contribution is equal to the employer’s contribution for such employee.

After the 2014 Employees’ Pension Scheme Amendment, the employers’ contribution to the Employees’ Pension Scheme of 8.33% of the basic salary was limited to a salary ceiling of ₹15,000 (ie ₹1,250 per month) only.

The excess amount contributed by the employers went to the EPF accounts of the employees as the contributions were paid from the actual wages which were higher than the wage ceiling.

This revision of the clause in the new scheme will allow both employees and employers to choose the allowance as a salary cap or higher than the actual basic pay they receive.

The Ministry of Labor has not yet commented on the matter.

Published – 02 Jul 2026 22:48 IST