The Employees' Provident Funds Scheme (EPF), 2026 has been notified vide Ministry of Labour and Employment Notification No. G.S.R. 525 (E) dated June 29, 2026, under the Code on Social Security, 2020, replacing the EPF 1952. The new framework aligns EPF administration with the Code and introduces several changes relevant for employers and employees. The scheme becomes effective from July 1, 2026.
Key developments and implications:
| Key development |
Analysis |
| Continuity of membership |
Members of the EPF 1952 would automatically be eligible and entitled to membership in EPF 2026. As a corollary, members who were excluded from the purview of the EPF Scheme, would continue to be excluded. In case of any dispute on applicability of membership the Regional P.F. Commissioner would be the deciding authority. |
| Mandatory and voluntary contribution |
- Mandatory contribution envisages 12% (or 10% in certain cases) contribution from both, the employer and employee’s side. While this rate of contribution is not negotiable, the base on which such contribution is made can vary between the statutory ceiling (currently INR 15,000 per month) to full “Wage” as defined under the Social Security Code, 2020. This would enable maintaining the status quo of contributing on basic salary, so long as it was greater than the statutory ceiling. In order to opt for a higher wage base, there needs to be a joint option filed from the employer and employee. Since the option is a joint one, the employer cannot be compelled to contribute on a higher wage base. From our current reading, we believe that there cannot be a differential wage base for the employer and the employee. Hence, eventually, the mandatory contribution will happen on a wage base that is driven by organisational policy. If an employee is desirous of a higher PF contribution, he may do so additionally, through the voluntary contribution route.
- Voluntary contribution envisages additional contributions on wages over and above the mandatory contribution or at a rate above the statutory rate (currently 12%). This route of contribution is available to only employees.
|
| Partial withdrawals |
- Partial withdrawal provisions have been harmonised for items like illness, education and marriage (for self and family members) and housing requirements.
- A minimum balance of 25% of total contributions (including employer’s/ employee’s contribution and interest accredited thereon) needs to be maintained in a member’s account.
- The remaining amount, referred to as “Eligible Member Balance” may be fully withdrawn after completion of 12 months of total membership.
- However, there is a maximum number of partial withdrawals varies for each type of such withdrawal.
|
| International workers |
- An International Worker (IW) becomes a member of EPF 2026 provided he does not attract exclusion from its provisions by virtue of being detached employee under the aegis of a Social Security Agreement (SSA), a Bilateral Comprehensive Agreement containing a clause on social security prior to October 1, 2008.
- Details of IWs would need to be uploaded electronically by an employer, in the specified time and manner.
- With the exception of IW cases covered by SSA and equivalent arrangements, withdrawals would be permissible after attaining 58 years of age.
- As per the current reading of EPF 2026, the statutory ceiling (INR 15,000 per month) for the consideration of “Wage” for IWs, seems to apply.
- However, an employee, employed in another country specified under Paragraph 9(6), shall have the option to be detached from the other country’s social security plan. In such case, he shall contribute on wage without application of the statutory ceiling.
|
| Contractor compliance |
- A principal employer is one who engages employees by or through a contractor.
- A principal employer needs to pay PF contributions and administration charges for such employees, where the contractor is not registered separately.
- In the case of a contractor being registered, the principal employer still needs to have checks and balances in place to ensure that PF contributions are being made correctly and on a timely basis.
- Forms X (registration), Form XI (contractor employee details) and Form XII (employer contributions by the employer and recovery from employees) need to be submitted in the specified time and manner.
|
| Special provisions |
- Employees’ Enrolment Campaign, 2026
- Shall be effective from July 1 to October 31, 2026, and encourages the coverage for employers
- Employers to satisfy specified compliances
- Acceptance to be provided by EPFO on their portal
- VISHWAS 2026
- Shall be effective from July 1 to December 31, 2026, and may be extended to June 30, 2026, by the Central P.F. Commissioner with recorded reasons
- Will be applicable where a case for damages is open and the entire amount has not been deposited
- Open matters to be brought to an expeditious closure
|
WTW recommendations for employers:
- Check payroll and contribution processes for alignment with the new wage-linked framework.
- Review higher wage contribution arrangements and keep supporting documentation updated.
- Refresh employee communications, withdrawal FAQs and HR helpdesk guidance.
- Identify any historical defaults and assess whether the relief provided under Employees’ Enrolment Campaign, 2026 and VISHWAS, 2026 may apply.
- Review and strengthen monitoring controls for ongoing EPF compliance, especially with regard to contractor and IW returns.
Please feel free to reach out to your WTW consultant or write to WTWIndia@wtwco.com for any questions or guidance around this development.
