Contribution rates and the ₹25,000 ceiling
The employee contributes 12% of basic plus DA. The employer also contributes 12%, of which 8.33% goes to the Employees' Pension Scheme (EPS) on wages up to the ceiling and the balance 3.67% to the employee's EPF account. On top of that, the employer pays EDLI at 0.5% and EPF administration charges at 0.5% (admin is subject to a small minimum).
The wage ceiling for mandatory coverage is ₹25,000 per month with effect from 17 September 2026 under notification S.O. 5109(E) issued under the Code on Social Security 2020. Employees earning basic plus DA above the ceiling can be covered voluntarily or by agreement, and many companies contribute on actual wages. For September 2026 payroll the ceiling applies on a split basis: ₹15,000 for 1–16 September and ₹25,000 for 17–30 September.
- Employee: 12% of basic plus DA (up to ₹25,000 mandatory; above by agreement)
- Employer: 8.33% to EPS (capped at the ceiling) + 3.67% to EPF
- Employer extras: EDLI 0.5% and admin charges 0.5%
- Filing: monthly ECR on the EPFO portal and payment by the 15th of the following month
UAN, ECR and the monthly workflow
Every member has a Universal Account Number (UAN) that stays with them across employers. On joining, the employer links the employee's existing UAN or generates one, and collects KYC (Aadhaar, PAN, bank account). Each month the payroll system produces an Electronic Challan-cum-Return (ECR) text file listing each member's wages, contributions and non-contributory (NCP) days; the employer uploads it and pays the challan by the 15th.
NCP days matter: they are the LOP days in the month, and they explain to EPFO why a member's contribution is lower than the full-month figure.
How the Code on Wages affects the PF base
Under the uniform definition of wages, if allowances excluded from wages exceed 50% of total remuneration, the excess is added back and attracts EPF. A ₹40,000 gross with ₹15,000 basic has ₹5,000 added back, making the PF base ₹20,000, not ₹15,000. Combined with the higher ceiling, this raises employer cost for many mid-range salaries.
Contractors and security agencies should note that the principal employer is liable for PF if the contractor defaults, so clients increasingly ask for the monthly ECR and payment receipt before clearing invoices.
A guard has basic plus VDA of ₹20,000, within the new ceiling. Employee contribution is 12%, ₹2,400. Employer EPS is 8.33%, ₹1,666, and employer EPF is 3.67%, ₹734, totalling ₹2,400. EDLI at 0.5% is ₹100 and admin at 0.5% is ₹100. Total monthly outflow to EPFO for this member is ₹5,000, of which ₹2,400 came from the guard's salary. Before 17 September 2026 the mandatory base for this guard would have been capped at ₹15,000.
Attend Mitra payroll preparation applies EPF settings per employee, derives NCP days from attendance-based LOP, and includes employee and employer PF columns in the salary register and payslips. Filing the ECR and paying the challan on the EPFO portal remain the employer's task.