Got salary on Friday? Wondering why is your in-hand amount lower this month? The new EPF ceiling of ₹25,000 explained

Several salaried employees have noticed a dip in their in-hand pay after receiving their October salary. Multiple posts on social media platforms such as Reddit and LinkedIn highlight this issue, with employees questioning why their take-home salary has reduced despite no change in their cost-to-company (CTC).

The reason behind your lower pay is the government's decision to raise the mandatory provident fund (PF) wage ceiling from ₹15,000 to ₹25,000 per month, effective from September 17. This is the first such revision in 12 years.

The previous ceiling had been in place since September 2014. The change raises the wage limit used for mandatory EPF coverage, but it does not mean every salaried worker will suddenly have PF calculated on their full gross salary.

The impact of the Employees' Provident Fund (EPF) wage ceiling hike will vary depending on an employee’s salary structure, existing PF contributions and whether they were covered under EPF earlier.

• If EPF wage ceiling was earlier capped ₹15,000: In this case, the employee contribution can rise from ₹1,800 to ₹3,000 per month after the change, reducing the take-home pay by ₹1,200.
• If the employee was not covered by PF earlier: If someone earns between ₹15,000 and ₹25,000 and wasn't an EPFO member earlier, 12% of their basic pay will now be deducted. For example, on a basic salary of ₹20,000, the monthly deduction would be ₹2,400.
• If the employee is already contributing PF on an actual basic wage of ₹25,000 or more: They may see little or no change in their take-home salary or PF contribution. An employer could also absorb or restructure part of the additional cost, depending on the employment contract and CTC.

However, some employees may have seen a steeper reduction in their October take-home salary because their payslip also included a one-time adjustment for the 14 days between September 17 and September 30. This means the additional PF deduction for the second half of September may have been recovered along with the regular October contribution.

The one-time arrears adjustment will no longer apply next month, so employees may see a slight increase in their in-hand salary. However, the regular monthly PF deduction will continue under the revised wage ceiling.

The hike in wage ceiling for EPFO membership brings an additional 51 lakh employees under mandatory provident fund cover, and widening social security coverage for formal-sector workers.

Notably, the EPFO also administers pension under the Employees’ Pension Scheme (EPS) and insurance protection under the Employees’ Deposit Linked Insurance Scheme (EDLI). Hence, benefits under these schemes are also likely to be enhanced after the change.

You can check your EPF contributions online through the EPFO member passbook portal or via salary slips. Both the employee and employer contribute towards EPF, however only the employer contributes towards EPS (if you are eligible) and ELDI scheme.

The latest EPFO data shows around 7.98 crore contributing members across about 7.68 lakh contributing establishments, while the EPS provides pension benefits to around 82 lakh pensioners.

Eshita Gain is a digital journalist at Mint, where she joined in May 2025. She writes on corporate developments, personal finance, markets, and business trends, with a focus on delivering timely and relevant stories to a broad audience. <br><br> While her core beat lies in business and finance, she is not confined to a single niche and frequently explores stories across domains, including international relations and policy developments. <br><br> She holds a postgraduate diploma in business and financial journalism by Bloomberg from the Asian College of Journalism (ACJ), Chennai. During her time there, she received rigorous training in tracking financial data, interpreting corporate filings, and reporting on business developments. She has pursued her graduation from St. Joseph’s University, Bengaluru in a multi-disciplinary course. Her majors included Journalism, International Relations, peace and conflict studies. <br><br> Eshita has previously worked in digital marketing, which enables her to write SEO friendly copies that are clear and engaging. <br><br> Her primary interest lies in breaking down complex subjects and writing clear, accessible copies that inform readers. She aims to bridge the gap between technical financial language and everyday understanding. Outside the newsroom, Eshita enjoys reading non-fiction, and exploring new places, constantly seeking fresh perspectives and stories beyond headlines.

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HomeMoneyPersonal FinanceGot salary on Friday? Wondering why is your in-hand amount lower this month? The new EPF ceiling of ₹25,000 explained

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