EPF Scheme 2026: What HR & Payroll Teams Need to Know

The newly notified EPF, EPS, and EDLI schemes under the Code on Social Security represent one of the most significant social security reforms in recent years. While the core 12% contribution rate and ₹15,000 statutory ceiling remain intact, the shift from "pay" to "wages," updated withdrawal limits, and new amnesty schemes require immediate action from employers.

In our recent greytShift webinar hosted on September 3,2026, CA Vijay Bharech, Partner at Deloitte India, breaks down what these rule changes mean in practice for compliance, payroll processing, and employee benefits.

What are the top highlights of the newly notified EPF Scheme 2026?

CA Vijay Bharech: The key takeaways revolve around stability in rates, structural wage shifts, relaxed member access, and new employer compliance windows:

• Unchanged Base Rates & Ceilings: The statutory PF contribution rate remains at 12%, and the existing wage ceiling continues at ₹15,000 per month. However, future revisions to the ceiling can now be made directly via notification without altering the scheme itself.
• Shift from Pay to Wages: Calculations have moved from "pay" to the standard definition of "wages" under the Code on Social Security.
• Simplified Withdrawals & Advances: Rules for employee advances during service have been made far more flexible.
• Strict Governance for Exempt Trusts: In-house exempt PF trusts face enhanced governance standards and must seek re-approval every two years.
• Special Relief Schemes: The government has introduced target windows—such as EEC, Vishwas, and Amnesty—to regularize past non-compliance and clear legacy litigations.

How does the shift from "pay" to "wages" change PF calculations?

CA Vijay Bharech: The contribution base now uses the uniform definition of "wages" prescribed under the Code on Social Security, which accounts for total remuneration minus specific statutory exclusions and subject to deemed inclusion criteria.

While the rate remains 12%, altering the base may change the final contribution amount for employees earning under the ₹15,000 ceiling. For those earning above ₹15,000, contributions on the higher base remain optional. Furthermore, the explicit requirement to seek prior approval from the RPFC to contribute on wages above ₹15,000 has been removed, granting greater flexibility to both employers and employees.

Do these updates affect existing UANs, PF balances, or pension entitlements?

CA Vijay Bharech: No. Existing PF accumulations, Universal Account Numbers (UANs), and pension entitlements continue seamlessly. Existing PF members are automatically covered under the updated framework without needing fresh enrollments or new UANs.

What has changed regarding PF advances and final withdrawals?

CA Vijay Bharech: The rules treat in-service advances and post-employment withdrawals differently:

• In-Service Partial Advances: Members with at least 12 months of service can withdraw up to 75% of their eligible balance (leaving a mandatory 25% minimum balance in the account). For illness, there is no cap on the number of withdrawals. Members can claim advances up to 10 times for education, 5 times for marriage, 5 times for housing, and twice per financial year for special circumstances.
• Settlement Timeframe: Complete PF advance claims must be settled by the EPFO within 20 days.
• Final Withdrawals Upon Leaving Service: To claim a full 100% PF balance withdrawal due to unemployment, the required non-employment period has increased from 2 months to 12 months. This 12-month waiting period does not apply to female members who resign to get married.

How do the updated penalty and damages rates work for delayed contributions?

CA Vijay Bharech: Penalty (damages) rates for delayed monthly contributions have been rationalized retrospectively from June 14, 2024:

• Delay up to 2 months: Damages rate is reduced to 0.25% per month.
• Delay between 2 to 4 months: Damages rate is reduced to 0.5% per month.
• Delay exceeding 4 months: Damages rate remains at 1% per month.

What are the key changes in the Employee Pension Scheme (EPS)?

CA Vijay Bharech: The basic pension formula remains unchanged. However, to encourage long-term retirement savings, withdrawal benefits for members leaving service are now available only after 36 months (3 years) from the date of the last contribution or upon reaching superannuation.

What are EEC 2026, Vishwas 2026, and Amnesty 2026?

CA Vijay Bharech: These are three distinct, one-time compliance windows:

• Employee Enrollment Campaign (EEC 2026): Open from June 29, 2026, to October 31, 2026. It allows employers to voluntarily enroll eligible employees who were left out between April 2009 and March 31, 2026. Employers pay the employer contribution, interest, and a nominal ₹100 damages fee, while the employee's contribution portion is waived if not previously recovered.
• Vishwas 2026: A 6-month dispute resolution scheme focused on past delayed-contribution defaults prior to June 14, 2024. Employers can settle pending litigation or notices by paying reduced damages rates (0.25% or 0.5% for delays up to 4 months) alongside applicable interest.
• Amnesty 2026: A 6-month window (extendable by another 6 months) for recognized in-house PF trusts that lack formal exemption notifications from PF authorities to apply for official exemption status under the EPF laws.

What immediate action steps should employers and HR teams take?

CA Vijay Bharech: Employers should execute a 10-point action plan:

1. Review organizational wage definitions and salary structures against the new wage code.
2. Assess the financial impact on PF, gratuity, ESI, and statutory bonus costs.
3. Evaluate eligibility for the EEC 2026, Vishwas 2026, and Amnesty 2026 schemes.
4. Audit governance, reporting, and corpus size (e.g., minimum 500 employees or ₹50 crore corpus) for in-house exempt PF trusts.
5. Draft transparent employee communications and FAQs regarding withdrawal and contribution options.
6. Reconfigure payroll software, HRMS systems, and compliance engine logic.
7. Update standard employment contracts and company policies.
8. Train internal HR, payroll, tax, and compliance teams on operational changes.
9. Review contractor compliance frameworks and principal employer obligations.
10. Establish a detailed internal implementation roadmap.

Documented Compliance Ensures Operational Smoothness

From adjusting payroll formulas to resolving past disputes through relief schemes, staying ahead of EPF Scheme 2026 requires proactive documentation and system readiness. Re-evaluating internal payroll setups now will prevent unnecessary penalties and ensure seamless benefit delivery for employees.

Want to watch the full discussion? Access the complete webinar recording here: https://youtu.be/_o3YBrqBOQs