Provident Fund (PF)
The EPFO of India offers the Employees Provident Fund as a small saving scheme to both Indian workers and international workers. The method allows the accumulation of funds and accrual of interest on the accumulated funds. The funds thus collected comprise contributions from both employees and their employers.
Contributions from employees, as well as employers, add to the EPF. However, the commonly thought is that the entire portion of contribution from an employer goes towards something other than the Employees Provident Fund. Moreover, it is essential to understand the allocation of funds to different components.
Provident Fund Calculator
PF Contribution
Provident Fund Contribution from both employee & employer
- Contribution by an employee: Contribution towards EPF is deducted from employee’s salary i.e., 12% of basic salary and PF applicable allowances of the employee
- Contribution by an employer: The contribution made by the employer is 13% of the basic salary and PF applicable allowances of the employee. However this 13% is further subdivided into:
- 3.67% of contribution towards Employees’ Provident Fund
- 0.5% of contribution towards EPF Administration Charges
- 0.5% of contribution towards EDLI Administration Charges
- 8.33% of contribution towards Employees’ Pension Scheme
PF Wage Ceiling
From September 17, 2026, the wage ceiling for mandatory EPFO coverage has been increased from ₹15,000 to ₹25,000 per month. This change expands mandatory EPFO coverage to eligible employees in the ₹15,000–₹25,000 wage range, subject to the applicable EPF provisions.
The ₹25,000 figure refers to the EPFO wage ceiling for mandatory coverage and not necessarily to an employee’s total salary or CTC. Employees earning wages above the statutory ceiling may also contribute on higher wages where permitted under the applicable EPFO provisions.
Therefore, PF contribution should be determined based on the employee’s PF wages and applicable EPFO rules, rather than simply their total monthly salary.