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Inside this issue:
- PF changes and payroll impact
- Year-end payroll checks
- Labour law thresholds to watch
Hey HR Folks,
EPFO has raised the monthly PF wage ceiling from ₹15,000 to ₹25,000, effective September 17, 2026.
The change affects PF contributions, EPS eligibility, and payroll calculations for some employees. Here’s what HR teams need to know before processing the next payroll.
1. Recalculate contributions for employees between ₹15,000 and ₹25,000
Employees earning between ₹15,000 and ₹25,000 are now covered under EPF, EPS and EDLI, and the contribution base for existing members in the range has gone up too.
- At ₹25,000, the employer’s 12% contribution comes to ₹3,000 a month, up from ₹1,800 under the old ceiling.
- Of that 12%, 8.33% goes toward EPS, now capped at about ₹2,083 instead of ₹1,250.
- EDLI now covers this band too, though the maximum assurance stays at ₹7 lakh.
- Employees whose PF sits inside their CTC may see slightly lower take home pay this cycle.
2. Start your year-end payroll checklist now
Changes like the one above are what a year end checklist catches. Year-end payroll runs in four phases, starting well before March, and starting early means catching updates like this before the final run.
- Verify employee PAN and Aadhaar details and collect investment proofs in January and February, ahead of the March run.
- Confirm full and final settlements close within the two working day window the labour codes now require.
- Reconcile PF and ESI records against monthly deductions and challan payments, not just at year end.
- Collect investment declarations for the new year early to avoid the usual rush of March tax adjustments.
3. Share the in-hand salary calculator with your team
- The numbers above are estimates based on a flat wage band. Each employee’s actual change depends on their own basic salary, so it helps to let them check the exact number themselves.
- Employees can enter their CTC and see their updated take home pay for FY 2026-27 in a few seconds.
- The calculator applies the new ₹25,000 EPF ceiling to both the employer and employee contribution automatically.
- It also factors in professional tax by state and income tax under either tax regime.
- The full breakdown shows exactly where each rupee goes, from EPF and gratuity to professional tax and income tax.
Your checklist for this week
- Pull the list of employees whose PF wages fall between ₹15,000 and ₹25,000.
- Recalculate their EPF, EPS and EDLI contributions against the new ceiling.
- Check whether this changes take home pay for anyone in that range.
- Flag any changes to finance before your next payroll run.
A quick review now can help you catch contribution changes before the next payroll run.
Want to simplify payroll compliance? See how Keka handles PF, ESI and labour law requirements.
Until next time,
