Provident fund: the new ₹25,000 ceiling, month by month

You and your employer each pay 12% of your wages into the Employees' Provident Fund. Most employers pay only up to the statutory wage ceiling, and on 17 September 2026 that ceiling rose from ₹15,000 to ₹25,000 a month. If your wages are above ₹15,000, your PF deduction goes up from October, and so does your employer's contribution.

Many salary calculators still use ₹15,000 for the whole year. This one applies the change month by month.

The ceiling changed in September

S.O. 2702(E) of 29 May 2026 had re-notified the ceiling at ₹15,000 under the Code on Social Security. S.O. 5109(E) of 17 September 2026 replaced it with ₹25,000 from the date of publication, for the provident fund, the pension scheme and EDLI insurance alike.

What comes out of your salary

Your own 12%, when your employer contributes up to the ceiling. "Wages" here are Labour Code wages: Basic and DA, plus anything the 50% rule adds back.

At ₹15,000 or less nothing changes. Between the two ceilings the deduction rises to 12% of your wages. At ₹25,000 or more it goes from ₹1,800 to ₹3,000 a month, and next year's total is ₹6,640 higher than this year's.

Your employer pays the same amount again. If your offer letter counts employer PF inside your CTC, as most do, that extra contribution can also come out of your CTC, usually by trimming special allowance. The drop in in-hand from October is then up to twice the rise in your own deduction, before tax.

Your employer's 12% and the pension split

Part of the employer's contribution goes to the Employees' Pension Scheme: 8.33% of wages up to the ceiling. The rest goes into your PF account.

The pension share does not sit in your PF balance and does not earn PF interest; it counts toward a pension under the scheme instead. With the higher ceiling both parts grow, so more goes to the pension scheme and more to your PF account.

PF on the ceiling or on full wages

Some employers contribute 12% of your full wages instead of stopping at the ceiling. That is allowed when you and your employer agree to it, and it puts much more into PF, but it costs monthly in-hand. Here is the difference using the calculator's standard structure, with Basic at half of CTC and employer PF inside it.

In-hand figures are a month, on the cheaper regime and averaged across this year's ceiling change; PF is your share and your employer's together. At 20 LPA, PF on full wages puts ₹1,81,280 more a year into PF and costs ₹13,535 a month in hand. That money is still yours, as long-term savings rather than salary.

Tax on PF

• Your contribution counts toward the ₹1,50,000 limit under section 123 (the old 80C), but only in the old regime. The new regime gives no deduction for it.
• Your employer's contribution is not taxed, unless employer contributions to PF, NPS and superannuation together exceed ₹7,50,000 a year. The excess is taxed as part of your salary; the calculator includes it.
• Interest on your own contributions above ₹2,50,000 in a year is taxable every year, or above ₹5,00,000 if your employer does not contribute. With PF on full wages and Basic at half of CTC, your own share passes ₹2,50,000 above a CTC of about ₹41.67 lakh. The calculator does not include this interest, because it depends on your PF balance and the rate declared each year.

Try it with your own figures

The calculator uses the ceiling by default. To see PF on full wages, open advanced mode with full-wage PF, and compare the two.

Sources: Employees' Provident Funds Scheme, 2026 (G.S.R. 525(E), 29 June 2026) under the Code on Social Security, 2020; S.O. 2702(E) of 29 May 2026 and S.O. 5109(E) of 17 September 2026 on the wage ceiling. Full method.