The EPFO's new wage ceiling may alter the pay slips of employees earning certain salaries starting October 2026. Because the new rules will impose a wage ceiling of ₹25,000, those whose basic and DA exceed ₹15,000 and whose PF deductions were previously based on the ₹15,000 limit may face an impact on their take-home pay.

If the basic is ₹20,000 then how much difference will it make?

Suppose an employee's basic salary plus DA is 20,000. Currently, PF deductions of 1,800 are made from the employee's salary based on the wage ceiling of 15,000. Therefore, with the new limit of 25,000, this contribution could increase to 2,400. This means that their take-home salary will be reduced by 600 rupees per month. However, this money won't be lost. The additional amount will be deposited into the employee's PF account. Therefore, even if their actual salary is reduced, future savings can increase.

What if the PF salary is Rs 25,000?

If the PF salary is ₹25,000, the employee's PF contribution can be ₹3,000. This means that ₹1,200 more will be deposited into the PA each month compared to the previous limit of ₹15,000.

What will be the impact on CTC?

It's important to note that CTC is not a direct legal basis for determining PF. Contributions are determined based on the applicable PF salary and related rules. Therefore, a company cannot deduct its statutory PF contribution directly from an employee's salary. However, the CTC structure may vary depending on the company's total salary expenditure.

Who needs more attention?

Those with a basic + DA of more than ₹15,000 should review their October salary slips. HR should understand the changes in PF salary, employee contribution, company contribution, and CTC. It's important to compare current salary slips with old ones to determine if the new deductions have reduced their take-home pay.

PC: NDTV INDIA