Is 12% PF calculated on basic or on gross salary?

On PF wages: basic pay, dearness allowance and retaining allowance. HRA, conveyance and most other allowances are excluded, but under the Labour Codes, if the excluded items exceed 50% of total remuneration, the excess is treated as wages.

Why is my employer's EPF share smaller than mine?

Because 8.33% of the employer's 12% goes to the pension scheme (EPS), which is not shown in your PF passbook balance as EPF. At ₹25,000 PF wages you contribute ₹3,000 to EPF; your employer pays ₹2,083 to EPS and ₹917 to EPF.

Can my employer deduct its own share or EDLI from my salary?

No. The employer's 12%, EDLI and admin charges are the employer's cost. They are often shown inside CTC, but only the employee's 12% may be deducted from wages.

Is the consultation really free?

Yes. The consultation and case assessment are free, with no obligation. If you decide to go ahead, there is still nothing to pay upfront: FundRaksha Legal charges 30% only on the amount actually recovered. Court fees, if a matter goes to court, are borne by the client.

Are there any upfront fees?

No. FundRaksha Legal charges a 30% success fee, only on the amount actually recovered. If nothing is recovered, there is no success fee. Court fees, if any, are borne by you and told to you upfront.

How fast does my case start?

Within 24 hours of receiving your complete documents, a dedicated advocate is assigned and the legal notice is sent as an e-notice, followed by registered post.

Do most cases go to court?

No. About 60% of our cases settle before anything is filed, through the notice, negotiation and a payment plan. The rest go to MSME Samadhaan, a Section 138 complaint, a civil suit or arbitration, handled by the same advocate.

Free calculator

PF calculator: employee and employer EPF contribution

Enter basic plus DA and the calculator splits every rupee of provident fund: the employee's 12%, the employer's 12% divided between pension (EPS) and provident fund (EPF), and the EDLI and admin charges the employer pays on top. It uses the ₹25,000 wage ceiling in force from 17 September 2026, with the old ₹15,000 ceiling available for earlier months.

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Basic + DA per month (₹)

Add retaining allowance if paidTotal monthly remuneration (₹, optional)

For the Labour Codes' 50% wage rule: if allowances exceed half of total pay, the excess counts as wages. Leave blank to skip.Wage ceiling

₹25,000 from 17 September 2026; use ₹15,000 for wage months before that date

Contribute on actual wages above the ceilingJoint option of employer and employee; EPS and EDLI stay cappedEmployee is an EPS (pension) memberUntick for someone who joined with wages above the ceiling

PF wages used

₹25,000

Capped at ₹25,000

Employee PF (12%)

₹3,000

Deducted from salary

Employer EPS (8.33%)

₹2,083

On wages up to ₹25,000

Employer EPF (balance)

₹917

12% employer share less EPS

EDLI (0.5%)

₹125

Employer only, on wages up to ₹25,000

EPF admin (0.5%)

₹125

Employer only

Total employer cost / month

₹3,250

12% + EDLI + admin

Credited to employee's PF / month

₹3,917

Employee 12% + employer EPF share

Employer cost / year

₹39,000

How each number is worked out

PF wages = basic + DA + retaining allowance, capped at the ₹25,000 ceiling: ₹25,000.
Employee share: 12% × ₹25,000 = ₹3,000.
Pension (EPS): 8.33% × ₹25,000 = ₹2,083. EPS never goes above 8.33% of the ceiling, even when PF is paid on higher wages.
Employer EPF: ₹3,000 − ₹2,083 = ₹917.
EDLI: 0.5% × ₹25,000 = ₹125; admin charges: 0.5% × ₹25,000 = ₹125.

Rates under the EPF Scheme, EPS and EDLI as applied by EPFO, with the wage ceiling notified under the Code on Social Security, 2020 (S.O. 5109(E), ₹25,000 from 17 September 2026). EPF admin charges are subject to a minimum of ₹500 a month per establishment. Contributions are rounded to the nearest rupee, with employer EPF taken as 12% less the EPS share. Higher-wage contribution needs a joint option by employer and employee; check your establishment's position before switching.

Short answer

The employee contributes 12% of PF wages (basic + DA + retaining allowance). The employer also contributes 12%, of which 8.33% goes to EPS on wages up to the ceiling and the rest (3.67% at or below the ceiling) to EPF. The employer additionally pays 0.5% EDLI and 0.5% admin charges. The wage ceiling is ₹25,000 a month from 17 September 2026 (S.O. 5109(E)), so at the ceiling each side pays ₹3,000 a month.

How the PF split works

Provident fund under the Code on Social Security, 2020 (which absorbed the EPF Act from 21 November 2025) has three schemes running together: the Employees' Provident Fund (EPF), the Employees' Pension Scheme (EPS) and the Employees' Deposit Linked Insurance Scheme (EDLI). The rates did not change with the Code. What changed is the definition of wages and, on 17 September 2026, the wage ceiling.

Head	Who pays	Rate	On which wages	Maximum at ₹25,000 ceiling
EPF (employee share)	Employee	12%	PF wages (capped at ceiling unless higher-wage option)	₹3,000
EPS (pension)	Employer	8.33%	Wages up to the ceiling only	₹2,083
EPF (employer share)	Employer	12% minus EPS	Same as employee share	₹917 at the ceiling
EDLI (insurance)	Employer	0.5%	Wages up to the ceiling	₹125
EPF admin charges	Employer	0.5%	PF wages	₹125 (min ₹500 per establishment)

The government also contributes 1.16% of wages up to ₹15,000 (₹174 a month) to EPS for members; that is separate from what the employer pays and does not change with the new ceiling, according to EPFO's FAQs on the revision.

Worked example: ₹30,000 basic, before and after the new ceiling

Riya earns basic plus DA of ₹30,000 a month and is an EPS member. Her employer contributes on the statutory ceiling, not on her full basic.

	Ceiling ₹15,000 (to 16 Sep 2026)	Ceiling ₹25,000 (from 17 Sep 2026)	Joint option on full ₹30,000
PF wages	₹15,000	₹25,000	₹30,000
Employee PF 12%	₹1,800	₹3,000	₹3,600
Employer EPS 8.33%	₹1,250	₹2,083	₹2,083 (still capped)
Employer EPF	₹550	₹917	₹1,517
EDLI 0.5%	₹75	₹125	₹125
Admin 0.5%	₹75	₹125	₹150
Total employer cost	₹1,950	₹3,250	₹3,875

Riya's take-home falls by ₹1,200 a month when the ceiling rises (₹3,000 instead of ₹1,800), but ₹3,917 a month now reaches her PF account, against ₹2,350 before, and her pensionable salary for EPS rises to ₹25,000. September 2026 is split: the ₹15,000 ceiling for 1 to 16 September and ₹25,000 for 17 to 30 September, filed in a single ECR.

Edge cases payroll teams get wrong

The 50% wage rule. From 21 November 2025, if allowances excluded from "wages" exceed half of total remuneration, the excess is added back. A salary of ₹60,000 with ₹20,000 basic has PF wages of at least ₹30,000, so contributions rise to the ceiling. Use the optional total remuneration field in the calculator.
Joiners above the ceiling. A person whose PF wages exceed ₹25,000 when joining is not required to become a member, and is not eligible for EPS. If they opt in with the employer's consent, the whole employer 12% goes to EPF.
Existing members already on higher wages continue as before; they do not need to cut contributions back to ₹25,000.
Restructuring CTC to avoid PF. EPFO's FAQs say employers cannot reduce statutory wages or recover their own share from employees by reworking CTC.
Admin charges minimum. An establishment pays at least ₹500 a month in admin charges even if 0.5% of total wages is lower.

Run it on every payslip

FundRaksha HR calculates PF, ESI and PT for every employee automatically on each payroll run, so the challans, ECR and payslips agree without a spreadsheet. When the ceiling changed mid-month in September 2026, the split computation is exactly the kind of thing a payroll tool should do for you. Check the matching ESI calculator and the CTC to in-hand salary calculator for the rest of the deductions, and the salary slip format for how to show PF on a payslip.

Sources

1,000+

businesses onboarded

₹50 Cr+

invoice value handled

700+

businesses got their money back

60%

of cases settled before court

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PF, ESI, PT and TDS calculated on every payroll run
Payslips, PF ECR, ESI, bank and Tally files
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FAQ

Questions, answered

Yes. The Ministry of Labour and Employment notified ₹25,000 a month as the wage ceiling for Chapter III (provident fund) of the Code on Social Security, 2020 by S.O. 5109(E) dated 17 September 2026, effective that day. It replaced the ₹15,000 ceiling. The ESI limit (₹21,000) is separate and did not change.

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This page is general information for Indian businesses, not legal advice for your specific case. Laws, rates and procedures change; speak to an advocate before acting. FundRaksha LegalTech Pvt Ltd is a technology company; legal work is carried out by enrolled advocates.