The central government has notified the Employees' Provident Fund (EPF) Scheme, 2026, replacing the independence era EPF Scheme of 1952. The new rules are effective from June 29.
The updated scheme aims to improve digital compliance, make administration more efficient, and ensure easier portability of EPF accounts. It also aligns the provident fund system with the new labour codes.
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Under the revised norms, one of the significant aspects is clarity on EPF contributions. The mandatory Employee Provident Fund contribution remains unchanged. This means that both employees and employers will contribute 12% of the employee's wages to this fund that earns interest. Managed by the Employee Provident Fund Organisation (EPFO), this critical corpus acts as a financial savings tool for retirement years.
New EPFO Schemes Notified
— EPFO (@officialepfo) July 1, 2026
Employees' Provident Fund Scheme, 2026
Employees' Pension Scheme, 2026
Employees' Deposit Linked Insurance Scheme, 2026
Ensuring Social Security for All#EPFO #EPFOWithYou #HumHainNa pic.twitter.com/NRo7mv5Xms
The scheme also updates rules for partial withdrawals of PF, allowing members to access funds for medical treatment, education, marriage, housing, and other specified needs.
Rs 1,800 Cap On Mandatory PF Explained
Under the new scheme, EPFO has clarified that the mandatory wage ceiling for PF calculations is Rs 15,000 per month. This means that regardless of how high your actual basic salary is, the contribution to PF will be calculated by considering this income threshold.
Since PF deduction requires a 12% contribution each from both the employee and the employer, this means that employees will see a total of Rs 3,600 contribution in their PF account.
This includes = 12% x Rs 15,000 = Rs 1,800 contribution from the employee, which is matched by the employer with another Rs 1,800.
Rules For Those Contributing More
Since the mandatory EPF contribution is fixed at 12% of a maximum of Rs 15,000 wages, any amount contributed beyond this is treated as a Voluntary Provident Fund (VPF) contribution. VPF is an optional savings scheme that allows salaried employees to invest more for retirement in the EPFO scheme. Earlier, many employers were making PF contributions based on the basic salary component, rather than the Rs 15,000 ceiling. The new rules clarify that the contributions are capped at wages of Rs 15,000 per month.
How Much Salary Can Be Contributed Towards PF?
As per the rules, employees can voluntarily contribute up to 100% of their Basic Salary and Dearness Allowance (DA). To be clear, an employer is not required to contribute towards the voluntary contribution.
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Under India's revised labour codes, the combined total of the Basic Pay and Dearness Allowance (DA) must be at least 50% of one's total remuneration. This means one can contribute significantly higher value into their PF, earning 8.25% interest annually to build a solid, guaranteed retirement corpus.
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