The government has notified the Employees’ Provident Funds (EPF) Scheme, 2026, replacing the EPF Scheme, 1952. One of the key changes under the new scheme is that employee contributions above ₹1,800 per month will now be voluntary under EPFO.
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The change follows the implementation of the Code on Social Security, 2020, and aims to bring the provident fund rules in line with the new legal framework. The new scheme is expected to apply to around eight crore EPF subscribers across the country.
PF Contributions Above ₹1,800 Now Optional
Under the new rules, the mandatory employee contribution will continue to be 12% of the statutory wage ceiling of ₹15,000 per month. This means the compulsory contribution remains capped at ₹1,800 per month.
Employees earning more than the wage ceiling can still contribute a higher amount if they choose to do so. However, any contribution above ₹1,800 will be treated as voluntary. Employers can also continue contributing on higher wages where applicable, subject to existing provisions and mutual agreement.
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Earlier, many organisations deducted 12% of an employee’s actual basic salary even when it exceeded the statutory wage ceiling. The new scheme makes it clear that contributions beyond the mandatory limit are optional for employees.
Withdrawal Rules Simplified
The EPF Scheme, 2026 also simplifies withdrawal provisions. Earlier, members could withdraw PF money under 13 different categories. The new scheme reduces these to three broad categories, making the rules easier to understand and follow.
The government expects this change to reduce paperwork and help speed up claim processing. The scheme also includes updated provisions related to Aadhaar-based identification and digital processes for EPF members.
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No Change in Wage Ceiling or Interest Rate
While the new scheme replaces the 1952 rules, there is no change in the statutory wage ceiling of ₹15,000 per month. Similarly, the EPF interest rate will continue to be decided every year by the government based on the recommendation of the Central Board of Trustees.
The Voluntary Provident Fund (VPF) facility also remains available for employees who wish to save more for retirement by contributing above the mandatory limit.
The EPF Scheme, 2026 is part of the government’s effort to update India’s social security laws under the Code on Social Security, 2020. While several procedures have been simplified, the basic structure of EPF contributions and retirement savings remains largely unchanged.
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About the Author
Sheetal Singh
Contributing Writer