How EPF contributions are split
Both the employee and the employer contribute 12% of PF wages, which means basic pay plus dearness allowance and any retaining allowance. The employee share goes entirely to the EPF account. The employer share is divided: 8.33% goes to the Employees' Pension Scheme, calculated on wages up to the statutory ceiling, and the remaining 3.67% goes to EPF. The employer additionally pays 0.5% towards the Employees' Deposit Linked Insurance scheme and 0.5% as EPF administrative charges, both on PF wages up to the ceiling.
From 17 September 2026 the statutory wage ceiling is ₹25,000 per month, raised from ₹15,000 by Ministry of Labour and Employment notification S.O. 5109(E). For September 2026 payroll the ceiling applies on a split basis, ₹15,000 for 1 to 16 September and ₹25,000 for 17 to 30 September. Employers may contribute on wages above the ceiling by agreement; when they do, the EPS portion still stops at the ceiling and the balance of the employer 12% goes to EPF.
- Employee: 12% of basic + DA (or of the ceiling if capped)
- Employer EPS: 8.33% on wages up to ₹25,000 (max ₹2,082.50)
- Employer EPF: 12% of PF wages − EPS amount
- EDLI 0.5% and admin 0.5% on capped wages, paid by the employer
- ECR filing and payment due by the 15th of the following month
Voluntary PF and higher-wage employees
An employee earning basic plus DA above ₹25,000 can be enrolled with contributions capped at the ceiling or on full wages. Capping keeps employer cost predictable; full-wage contribution builds a larger retirement corpus and is common in organised-sector offer letters. Whichever option is chosen must be applied consistently and reflected in the CTC letter, because the employer share is part of CTC in most Indian salary structures.