EPF Scheme, 2026: A Complete Guide for Employers and Employees

What is the EPF Scheme, 2026? 

The Employees' Provident Funds Scheme, 2026 was notified on 29 June 2026 and replaces the Employees' Provident Funds Scheme, 1952. It brings provident fund administration under the Code on Social Security, 2020, which consolidates 29 central labor laws into a single framework.

Existing PF balances, Universal Account Numbers (UANs), memberships, and accumulated interest carry forward without interruption. What changes is how the scheme is administered, enforced, and accessed going forward.

Who does it apply to?

The EPF Scheme, 2026 applies to every establishment covered under the Code on Social Security, 2020. Every employee whose wages do not exceed the statutory wage ceiling of Rs. 15,000/month is required to become a member of the Fund.

Employees earning above Rs. 15,000/month are classified as "excluded employees" and are not required to become members, though they may do so voluntarily through a joint written opt-in with their employer.

International workers employed in India are also covered under the scheme, subject to applicable bilateral social security agreements.

Note: Existing EPFO members earning above Rs. 15,000/month continue to remain members under the new scheme.

What is new: the quick picture

• Contribution rates are unchanged: 12% for both employee and employer (10% for establishments specifically notified by the Central Government)

• The Rs. 15,000 wage ceiling for mandatory contributions has not been revised

• Contributions above Rs. 15,000 are now formally classified as voluntary

• Withdrawals simplified from 13 categories to 3, with a 25% minimum balance rule

• EPFO must now settle claims within 20 days or the responsible Commissioner is personally penalized

• All compliance filings are now electronic-only

• Principal employers are formally liable for contractor employees' PF

• Three time-bound compliance drives, EEC, Vishwas, and Amnesty 2026, are now open to fix past compliance gaps

• The Central Government can temporarily defer or reduce contributions during a pandemic, endemic, or national disaster for up to three months at a time

Now, here's a breakdown of every major update:

Contributions

The mandatory contribution rate remains unchanged:

• Employee contribution: 12% of wages

• Employer contribution: 12% of wages

• Reduced rate: 10% for certain establishments notified by the Central Government

Contributions are calculated on wages actually drawn or payable during the month, whether paid daily, weekly, fortnightly, or monthly.

For wages paid in a currency other than Indian Rupees, conversion uses the telegraphic transfer buying rate offered by the State Bank of India on the last working day of the month for which wages are due.

The Rs. 15,000 wage ceiling and the Rs. 1,800 cap 

The statutory wage ceiling for mandatory EPF contributions has always been Rs. 15,000/month. The EPF Scheme, 2026 formally states this in writing: the 12% mandatory contribution applies only up to this ceiling. This means the maximum mandatory deduction for any employee is Rs. 1,800/month (12% of Rs. 15,000).

Voluntary contributions above Rs. 15,000 

Any contribution on wages above Rs. 15,000 is classified as voluntary for both employee and employer. 

What this means in practice:

• Employees can voluntarily contribute on wages above Rs. 15,000 at the statutory rate or higher, up to their net wages after deductions

• Employers can choose to match this but are not obligated to

• Either party can reduce or stop voluntary contributions at any time

• Employers pay additional administrative charges on wages on which voluntary contributions are made

In short, if a company currently deducts PF on basic pay above Rs.15,000 for any employee, this is now formally voluntary. Employer or employee can choose to stop it at any time.

Emergency modification of contribution rates 

In the event of a pandemic, endemic, or national disaster, the Central Government has the power to defer or reduce employer contributions, employee contributions, or both, for up to three months at a time.

Member obligations 

Every member must furnish the following to their employer or EPFO:

• Aadhaar number, with an Aadhaar-seeded bank account in any scheduled bank in India or a co-operative bank

• PAN issued under the Income Tax Act, 2025

• Universal Account Number (UAN)

The employer is responsible for facilitating UAN generation if the employee fails to do so on the portal.

The 25% minimum balance rule

The scheme introduces a minimum balance requirement for all partial withdrawals.

Minimum Balance = 25% of total contributions to the member's credit, inclusive of both the employee's and employer's share and interest, up to the date of withdrawal. This amount must always remain in the account after any partial withdrawal.

Eligible Member Balance = Total balance minus the Minimum Balance(25%)

In plain terms: while you are employed, you can access up to 75% of your total PF corpus through partial withdrawals. The locked 25% earns interest and stays untouched until final settlement. The minimum partial withdrawal amount is Rs. 1,000.

Full withdrawal: when the 25% is released 

The full balance, including the locked 25%, can only be withdrawn at final settlement:

• Retirement at or after the age of 55 years

• Permanent and total incapacity for work due to bodily or mental infirmity, certified by a medical officer of the establishment or a registered medical practitioner designated by the establishment

• Migration from India for permanent settlement abroad or for taking employment abroad

• Mass or individual retrenchment

• Voluntary retirement under mutual agreement between employer and employee

On the death of a member, the full balance standing to credit is payable to the nominee. If no valid nomination subsists, it is payable to the legal heirs.

Withdrawals: the new three-category system

Why the change was needed 

The old 13-category system required members to specify an exact purpose for each withdrawal. Mismatches between stated reasons and EPFO's accepted categories were the single largest cause of claim rejections. The 2026 scheme consolidates all purposes into three broad categories.

The three categories  

All categories allow partial withdrawal of up to 100% of Eligible Member Balance. Minimum 12 months' total membership is required across all categories. No reason or documentation is required for Special Circumstances withdrawals.

Frequency limits reset for all members 

All frequency limits reset afresh for every member from the date the EPF Scheme, 2026 commences.

Members exiting before 12 months 

A member who exits employment before completing 12 months of membership is still eligible for partial withdrawal, but only up to the Eligible Member Balance on the date of withdrawal.

Claim settlement: the 20-day rule

For the first time, EPFO officials are personally and financially accountable for claim delays:

• Complete claims must be settled within 20 days of receipt

• If a claim is deficient, the deficiency must be communicated to the claimant within 20 days

• If a complete claim is delayed without sufficient cause, penal interest at 12% per annum accrues on the benefit amount and is deducted directly from the salary of the responsible Commissioner

This is the first time delayed claim settlement carries a defined financial consequence for EPFO, not just a stated expectation.

The Central Board is also empowered to make payments without a claim being filed, subject to a monetary ceiling, enabling auto-settlement for eligible members.

Employer obligations

Digital-first compliance 

All filings under the EPF Scheme, 2026 are mandatory in electronic form.

Consolidated employee return (Form V):

File within 15 days of the scheme applying to the establishment.

Lists every employee covered under the scheme. If there are no employees required or entitled to become members, file a Nil return.

New joiners and exits:

Within 15 days of the close of each month, upload electronically:

• Details of employees qualifying as Fund members for the first time

• Details of employees joining by transfer from another establishment (by linking UANs)

• Details of employees leaving service during the preceding month

Electronic Challan-cum-Return(Form VII) 

To be uploaded within 15 days of the close of each month. Contains contribution details payable in respect of each employee for that month. Payment of dues follows the ECR upload within the same 15-day window.

Ownership return(Form VI)

File on establishment registration. Contains details of directors, partners, managers, or any person with ultimate control over the establishment, along with documentary proof of identity. Update within 15 days of any change in ownership details. Display the extract at the establishment entrance and on the establishment website.

Filing any return after the due date attracts a penalty of Rs. 500/day, capped at the administrative charges payable for that month.

Principal employer liability: Contract Labor

If your establishment uses contract labor, this is the most significant shift in the new scheme.

The principal employer is formally responsible, alongside the contractor, for PF contributions and charges for all contractual employees. If a contractor defaults, the liability falls on the principal employer.

Form X: Principal employer must declare all contractors on the EPFO portal.

Form XI: Contractor must inform the principal employer electronically within 10 days of each month-close, with details of name, UAN, wages, and contributions payable for each contractual employee.

Form XII: Principal employer must submit a monthly abstract to the Commissioner within 20 days of each month-close, showing aggregate recoveries from contractual employees' wages and aggregate employer contributions.

Note: If all this information is made available through a dedicated EPFO portal, compliance is deemed to have been made for Form X, XI, and XII.

Three time-bound compliance drives

The government has opened three special windows alongside the new scheme.

1. Employees' Enrolment Campaign (EEC) 2026 

Valid until: 31 October 2026. Not extendable.

EEC 2026 allows employers to regularize employees who joined between 1 April 2009 and 31 March 2026 but were never enrolled under EPFO.

Eligibility:

• The employee must be currently employed as on the date of declaration

• For employees who have already left, no action is taken by EPFO provided the employer submits a full compliance undertaking

Terms:

• Damages: flat Rs. 100, not the usual percentage-based rate

• Employee share: waived if it was never deducted by the employer

• Employer must still pay interest for the past period under the Code and applicable administrative charges

If the declaration is found to involve misrepresentation or suppression of facts, it will be treated as void from the outset

2. Vishwas 2026 

Valid for: 6 months from notification date, extendable by up to 6 more months by the Central Provident Fund Commissioner.

Vishwas 2026 is a damages relief scheme for employers with pending dues, disputed orders, or uninitiated notices for defaults that occurred before 14 June 2024.

Terms:

• Damages settled at reduced rates: 0.25% to 1% per month of arrears, depending on the period of default

• Any pending appeals before a judicial forum are dropped once payment is made

• Employer must submit an undertaking that no further appeal will be filed

Condition: 

Interest for the relevant period must be fully remitted or recovered before settlement is accepted

Not applicable where the entire damages amount has already been deposited.

3. Amnesty 2026 

Valid for: 6 months from notification date, extendable by up to 6 more months on recommendation of the Central Board.

Amnesty 2026 is for establishments that have been operating PF trusts recognised by the Income Tax Department under the Income Tax Act, 1961, but without a formal exemption notification from the appropriate government.

Two categories:

Category I: Establishments that have already started complying as an un-exempted establishment or are opting to do so going forward, with sub-categories for trusts maintained for excluded employees and for non-excluded employees

Category II: Establishments seeking to continue as formally exempted

What it offers:

• Retrospective exemption is granted

• No default proceedings for periods where contribution and interest rates credited to member accounts were at par with or better than statutory rates

• Pending proceedings, if any, are withdrawn and abated

Conditions:

• Employer must make good any losses arising from wrong investments

• Pay applicable surcharges for deviations from prescribed investment patterns

• Bear the cost of any special audit directed by EPFO, to be completed within three months of application

Employer compliance checklist

• Review PF deductions above Rs. 1,800 for any employees and decide whether to continue as voluntary or restructure

• File Form V within 15 days of scheme applicability; file Nil return if no members

• Set up monthly upload process for new joiners, exits, and ECR (Form VII), all within 15 days of month-close

• File Form VI (ownership return) and display extract at establishment entrance and website

• Declare all contractors on the EPFO portal (Form X)

• Ensure contractors submit Form XI within 10 days of each month-close and submit monthly abstract in Form XII within 20 days of each month-close

• Facilitate UAN generation for all employees; provide e-Passbook access

• Audit employees hired between April 2009 and March 2026 for EEC 2026 eligibility, act before 31 October 2026

• Review pending damages orders for Vishwas 2026 eligibility

• If running an informal PF trust, evaluate Amnesty 2026 before the window closes

• If operating an exempted establishment, review the new governance requirements for trustees, audits, and reporting

All content in this guide is drawn directly from the Employees' Provident Funds Scheme, 2026, published in the Gazette of India (Extraordinary), G.S.R. 525(E), dated 29 June 2026. We recommend reviewing these changes with a qualified compliance professional before acting on them.

Frequently Asked Questions

• Do contribution rates change under the EPF Scheme, 2026?

No. The 12% contribution rate for both employees and employers remains unchanged. The Rs. 15,000 wage ceiling has also not been revised.

• Will my take-home salary change?

Not automatically. If your employer currently deducts PF on your actual basic salary above Rs. 15,000 and continues doing so, nothing changes. If your employer decides to restrict contributions to the statutory minimum of Rs. 1,800, your take-home will increase but your long-term PF corpus will be smaller.

• What is the Eligible Member Balance?

It is the amount you can actually withdraw, calculated as your total PF balance minus the 25% minimum balance that must remain in your account during employment.

• Can I withdraw my entire PF balance while employed?

No. A 25% minimum balance must remain in your account after every partial withdrawal. Full withdrawal is only permitted at final settlement, which includes retirement at 55+, permanent disability, retrenchment, voluntary retirement, or migration abroad.

• What are the new withdrawal categories?

Essential Needs (illness, education, marriage), Housing Needs (purchase, construction, loan repayment, renovation), and Special Circumstances (calamities, closures, unforeseen hardship). See the table in the partial withdrawals section of this guide.

• Do my old withdrawal frequency limits still count?

No. All frequency limits reset afresh for every member from the date the EPF Scheme, 2026 commences.

• What is EEC 2026 and should I act on it?

The Employees' Enrolment Campaign allows employers to enrol employees hired between April 2009 and March 2026 who are currently employed but were never registered under EPFO, at a flat damage of Rs. 100. The window closes on 31 October 2026 and is not extendable. If you have any such employees on your rolls, act now.

• Can EPFO delay my claim settlement?

Under the new scheme, complete claims must be settled within 20 days of receipt. If delayed without sufficient cause, penal interest at 12% per annum is charged on the benefit amount and deducted from the responsible Commissioner's salary.

• My establishment runs a PF trust recognized by the Income Tax Department but without formal EPFO exemption. What should I do?

You may be eligible for Amnesty 2026, which allows retrospective regularization without facing default proceedings. The window is open for 6 months from the notification date and is extendable by another 6 months. Review your eligibility with a qualified compliance professional.

• What documents does an employee need to provide under the new scheme?

Every member must furnish their Aadhaar number (with an Aadhaar-seeded bank account), PAN issued under the Income Tax Act, 2025, and their Universal Account Number (UAN).

• Is there a minimum amount for partial withdrawals?

Yes. The minimum partial withdrawal amount is Rs. 1,000 across all three categories.