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EPFO Update: Under new changes to Provident Fund contribution rules by the EPFO, PF deductions exceeding ₹1,800 will now be made only with your consent. This will impact your take-home salary.

EPFO New Rule: The Employees’ Provident Fund Organisation (EPFO) has introduced a major change in Provident Fund rules for its eight crore active subscribers, which could affect your take-home salary. Regarding the new rule, the EPFO ​​has stated that, henceforth, any PF contribution exceeding ₹1,800 per month will be entirely voluntary.

Employees will have the option for higher PF deductions

Under the new rule, a 12% contribution is mandatory up to the statutory wage limit (currently ₹15,000 per month). Any contribution beyond this amount will be considered voluntary. According to the provisions of the Employees’ Provident Funds Scheme, 2026, notified on Wednesday, “An employee may opt to make additional contributions on a voluntary basis—at the statutory rate or any rate higher than that—on the portion of their salary exceeding the statutory wage limit.”

New rule not applicable to everyone

This means that if your basic salary is ₹15,000 per month or more, government rules require a PF contribution of 12% of that amount—i.e., ₹1,800 per month. The new amendment to the rules is intended for those with significantly higher salaries.

For instance, if someone has a basic salary of ₹50,000, the previous rule required a PF deduction of 12% (approximately ₹6,000) from their salary. Under the new rule, even if your basic salary is ₹1 lakh per month, the company will deduct only the mandatory ₹1,800 based on the initial ₹15,000 limit. The employer will also make an equal contribution. Whether or not you wish to have additional PF deducted from the remaining salary for retirement savings will be entirely your choice.

How ​​does this benefit you?

If you choose not to have PF deducted from the salary amount exceeding ₹15,000, that sum will be added to your take-home pay; in other words, your salary payout will increase. Companies will also benefit, as they will not be legally required to make proportionately higher contributions based on a higher employee salary.