EPF, EPS, EDLI explained: On Rs 25,000 basic, how much do you and your employer pay?

Employees receiving wages up to Rs 25,000 per month will now be mandatory to enroll in the EPF, EPS, and EDLI schemes, and both employers and employees will contribute to wages up to Rs 25,000. 

For an existing employee, the employer should calculate the EPF contribution separately for the two periods. For the period up to September 16, 2026, the contribution will be calculated based on the earlier wage ceiling of Rs 15,000 per month.

From September 17, 2026, the employer will calculate the contribution based on the revised wage ceiling of Rs 25,000 per month.

If an existing employee is already an EPF member but was excluded from the Employees’ Pension Scheme (EPS), and their wages fall between Rs 15,000 and Rs 25,000 per month, the employer must enrol the employee as an EPS member with effect from September 17, 2026. Accordingly, the employer’s EPS contribution for such an employee will begin from September 17, 2026.

With the EPF wage ceiling now revised, the calculation of how much contribution goes towards EDLI, EPF and EPS becomes even more important for the members to understand.

Rs 25,000 PF wage: How much goes to EPF, EPS and EDLI?

For an employee whose applicable PF wages are Rs 25,000, the employee’s contribution to EPF is 12%, or Rs 3,000 a month. The employer also contributes 12%, or Rs 3,000. 

Of the employer’s contribution, 8.33%, or about Rs 2,083, goes towards the Employees’ Pension Scheme (EPS), while the remaining 3.67%, or about Rs 917, goes into EPF. 

The employer also contributes 0.5% of the PF wages towards the Employees’ Deposit Linked Insurance Scheme (EDLI). At Rs 25,000, this amounts to Rs 125 a month. 

The employee does not contribute towards EDLI. An EPF administrative charge is also payable by the employer. 

At 0.5% of Rs 25,000, this amounts to Rs 125 for illustration purposes. This is an establishment-level statutory charge and is not deducted from the employee’s salary.

Contribution	Rate	Paid by	Monthly amount
Employee EPF contribution	12%	Employee	Rs 3,000
Employer EPF contribution	3.67%	Employer	Rs 917
Employer EPS contribution	8.33%	Employer	Rs 2,083
EDLI contribution	0.50%	Employer	Rs 125
EPF administrative charges	0.50%	Employer	Rs 125

Therefore, about Rs 3,917 is credited to the employee’s EPF account each month, while about Rs 2,083 goes towards EPS. The EDLI contribution provides insurance cover and does not form part of the employee’s EPF balance.

Illustrative EPF corpus:

Period	At Rs 15,000 PF wages	At Rs 25,000 PF wages
After 10 years	Approx. Rs 4.36 lakh	Approx. Rs 7.27 lakh
After 30 years	Approx. Rs 36.85 lakh	Approx. Rs 61.43 lakh

These figures are illustrations based on constant monthly contributions and an assumed annual interest rate of 8.25%. 

Actual EPF balances will vary because the interest rate is declared annually, contribution levels may change, and employees may have breaks in service or make eligible withdrawals. 

Illustrative EPS pension calculation:

Rs 25,000 × 22 ÷ 70 = approximately Rs 7,857 per month. 

Rs 15,000 × 22 ÷ 70 = approximately Rs 4,714 per month. 

Rs 25,000 = pensionable salary

Rs 15,000 = pensionable salary in the second example

22 = pensionable service in years

70 = a fixed divisor prescribed under the EPS formula

A monthly EPS pension generally requires at least 10 years of eligible pensionable service. The actual pension payable depends on the member’s pensionable service, pensionable salary and other applicable EPS provisions. The EDLI benefit is separate from both EPF savings and EPS pension. The current maximum EDLI assurance benefit remains Rs 7 lakh.

If an employee dies while in service and the applicable conditions under the EDLI Scheme are met, the nominee or eligible family members can receive an assurance benefit. The maximum benefit under the scheme is currently capped at Rs 7 lakh. 

“The higher PF wage ceiling of Rs 25,000 can increase the wage base used in calculating the EDLI benefit. However, the statutory maximum remains Rs 7 lakh. Therefore, even where the formula produces a higher amount, the benefit cannot exceed the prevailing Rs 7 lakh ceiling,” said Rishi Agrawal, Ceo and Co-founder of Teamlease.   

The EDLI fund is subject to actuarial assessment, which can inform future changes to contribution rates or benefits. Any increase in the maximum assurance benefit would require the relevant statutory or regulatory change. Separately, eligible family members of an EPS member may receive survivor pension benefits. 

These can include a widow or widower pension and children’s pension, subject to the conditions prescribed under the EPS.

What common mistakes do employees make when checking their salary slips or EPFO passbook? 

One of the most common mistakes is assuming that the employer’s 12% contribution is entirely credited to the employee’s EPF account. It is not.

At PF wages of Rs 25,000, the employee contributes Rs 3,000 to EPF. The employer contributes another Rs 3,000, but this is divided between EPF and EPS: • About Rs 917 goes to EPF. • About Rs 2,083 goes to EPS. 

As a result, the employer’s EPF contribution may appear smaller than the employee’s contribution on the passbook. This does not mean that a contribution is missing. The balance has been allocated between EPF and EPS as prescribed. 

Employees also sometimes calculate PF contributions on their gross salary or cost to the company. PF contributions are instead determined using the applicable PF wage and the statutory rules. 

The revised Rs 25,000 ceiling does not mean that PF is automatically calculated on an employee’s entire gross salary. Another common misconception is treating the EPS contribution as part of the employee’s withdrawable EPF balance. 

The employer’s EPS contribution is directed towards the pension fund and serves a different purpose from the employee’s EPF accumulation. 

“The September 2026 contribution may also look different because the revised Rs 25,000 wage ceiling took effect from 17 September 2026. September therefore has two contribution periods: 1–16 September under the earlier Rs 15,000 ceiling and 17–30 September under the revised Rs 25,000 ceiling,” according to Agrawal.  

“Employers are required to account for the two periods separately. Where the additional employee contribution could not be recovered through September payroll, it may be adjusted in the subsequent payroll cycle in accordance with the applicable process,” Agrawal added.  

Finally, an employee should not rely only on the salary slip to confirm that a contribution has reached EPFO. The salary slip shows the amount deducted from salary, while the EPFO passbook can be checked to confirm the contribution credited to the member’s account. 

Employers are required to remit monthly contributions within the prescribed timeline, generally by the 15th of the following month. If a contribution deducted from salary does not appear in the EPFO records after the applicable processing period, the employee can raise a grievance through EPFO’s grievance mechanism.

Disclaimer: This article is for informational purposes only and should not be construed as investment, financial, tax, or legal advice. Any illustrations, examples, or return projections used in this article are for explanatory purposes only and do not guarantee actual investment outcomes. The views and opinions expressed by experts quoted in this article are their own and should not be considered investment recommendations. Readers should consult a qualified professional before making any financial decisions. 

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