HR glossary
What is Provident Fund (PF)?
Provident Fund (EPF) is a retirement savings scheme run by the Employees' Provident Fund Organisation (EPFO). Each month the employee and the employer each contribute 12% of the employee's basic pay (basic + DA). The money earns interest every year and is paid out on retirement or exit, subject to EPFO rules.
Key rules (2026)
- Contribution: 12% of basic + DA from the employee and 12% from the employer
- Wage ceiling: ₹25,000 a month from 17 September 2026 (it was ₹15,000). Many employers contribute only on this ceiling, so the maximum is ₹3,000 a month each side; some contribute on full basic
- Employer's 12% is split: 8.33% goes to the Employees' Pension Scheme (EPS) on wages up to the ceiling, the rest to your EPF account
- Interest: 8.25% for FY 2025-26, declared by EPFO's Central Board of Trustees and ratified by the government
- Under the Labour Codes, basic + DA must be at least 50% of total pay, so PF cannot be cut by keeping basic low
Example - basic ₹30,000, PF on the ceiling
- Your PF: 12% of ₹25,000 = ₹3,000
- Employer PF: ₹3,000, of which EPS 8.33% of ₹25,000 = ₹2,083 and EPF ₹917
- If PF is on full basic instead: ₹3,600 each side
FAQ
Questions about Provident Fund (PF)
Sources
- Ministry of Labour and Employment - EPF wage ceiling raised to ₹25,000 (16 Sep 2026)
- EPFO - Member portal (UAN, passbook, claims)
- EPF interest 8.25% for FY 2025-26: EPFO notification INV-11/2/2021-INV/E-41960/2519 dated 1 July 2026 (no public link yet)