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EPS Wage Ceiling Fixed at ₹15,000: What the 15 October 2026 Notification Means

4 November 2026 · Kanoonwale Bhaiya

On 15 October 2026, the Ministry of Labour and Employment amended the Employees' Pension Scheme, 2026 to state expressly that the Central Government's contribution is calculated only on wages up to ₹15,000 per month, even though the statutory wage ceiling for provident fund coverage now stands at ₹25,000.

What the notification says

The amendment was issued as Notification G.S.R. 890(E) in the Gazette of India (Extraordinary, No. 819) dated 15 October 2026, under clause (b) of sub-section (1) of Section 15 of the Code on Social Security, 2020. It makes two changes to paragraph 4(2) of the Employees' Pension Scheme, 2026. First, the words "such sum as may be specified by the Central Government" are replaced with the words "wages upto rupees fifteen thousand (Rs. 15,000/-) per month". Second, the words "and the Central Government" are omitted from the first proviso to that sub-paragraph.

In plain terms, the Scheme earlier left the figure on which the Government's share is computed to be specified later by the Central Government. That figure is now written into the Scheme itself as ₹15,000. The notification states that it comes into force on 17 September 2026, which is the same date on which the revised ₹25,000 wage ceiling took effect, so it operates retrospectively, from a date earlier than its publication.

Why the Government's share has been tied to ₹15,000

Under the existing structure, the employee contributes 12 per cent of wages to the Provident Fund, while the employer's 12 per cent is divided between the Provident Fund (3.67 per cent) and the Pension Scheme (8.33 per cent). The Central Government additionally contributes 1.16 per cent of wages towards the pension accounts of members. When the wage ceiling was raised from ₹15,000 to ₹25,000, a question naturally arose as to whether the Government's share would also be computed on the higher figure.

The present amendment answers that question. Press reports on the notification state that the Government's contribution will continue to be 1.16 per cent of wages up to ₹15,000, so that the increase in the ceiling does not enlarge the Government's outgo. By simple arithmetic, 1.16 per cent of ₹15,000 is ₹174 per month for each member. That figure is our own calculation from the stated percentage and ceiling, and it should not be read as a number prescribed in the notification.

Where this fits among the September and October notifications

The amendment is best understood as the last of three connected steps taken within a few weeks. It does not stand alone, and it should be read together with the other two.

Date Notification Effect
17 September 2026 S.O. 5109(E) Wage ceiling under Chapter III of the Code on Social Security, 2020 raised from ₹15,000 to ₹25,000.
25 September 2026 G.S.R. 847(E) Employees' Pension Scheme, 2026 amended so that existing Provident Fund members who are not yet pension members, and whose wages do not exceed the notified ceiling, become eligible for the Pension Scheme, with effect from 17 September 2026.
15 October 2026 G.S.R. 890(E) Wages on which the Central Government's contribution is calculated fixed at ₹15,000 per month, with effect from 17 September 2026.

The Employees' Pension Scheme, 2026 itself was notified by G.S.R. 527(E) on 29 June 2026 and replaced the Employees' Pension Scheme, 1995 and the Employees' Family Pension Scheme, 1971. The 15 October notification records that the principal Scheme was last amended by G.S.R. 847(E) of 25 September 2026.

What employers and employees should take from it

For most establishments, this notification does not require a fresh change in payroll, because it concerns the Government's share and not the employer's or the employee's. The practical consequence of the ₹25,000 ceiling for members and employers continues to flow from the September notification and from the pension-eligibility amendment of 25 September. An employer should nonetheless confirm that its payroll software and its Electronic Challan-cum-Return preparation do not assume any Government share beyond the ₹15,000 base, and should keep the three notifications together on the compliance file, together with the date from which each took effect.

Employees, for their part, should understand that a higher wage ceiling widens their own provident fund and pension coverage, whereas the Government's top-up under the Pension Scheme remains tied to the earlier figure. The distinction matters when members compare what is credited to their pension account with what is deducted from their salary.

The date of 17 September 2026 appears in all three notifications and is the point from which any computation should begin. Where an establishment has already settled its September and October workings, it would be prudent to have them reviewed against these notifications before the next return is filed, since the last two instruments were published after the ceiling had already taken effect.

This article is intended for general information and does not constitute legal advice. Readers should verify the position against the official Gazette notifications and EPFO circulars applicable to their establishment.

Sources

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