On 17 September 2026, the Ministry of Labour and Employment notified a revised wage ceiling of INR 25,000 per month for the purposes of Chapter III of the Code on Social Security, 2020. The notification (S.O. 5109(E)) was issued under clause (89) of Section 2 of the Code, and it supersedes the Ministry’s earlier notification S.O. 2702(E) dated 29 May 2026 except as regards actions already taken or omitted under that earlier notification.

The Legal Basis

Section 2(88) of the Code defines “wages” and Section 2(89) empowers the Central Government to prescribe a wage ceiling for specific statutory purposes. Chapter III of the Code deals with Employees’ Provident Fund provisions consolidating what was earlier governed separately under the EPF and Miscellaneous Provisions Act, 1952. The wage ceiling under this provision determines the income threshold up to which an employee is statutorily brought within the ambit of mandatory EPF coverage.

What Changed

  • New ceiling: INR 25,000/month
  • Supersedes: S.O. 2702(E), dated 29 May 2026
  • Effective from: 17 September 2026
  • Savings clause: Actions taken or omitted under the superseded notification before this supersession remain unaffected, a standard safeguard against retrospective disruption of accrued rights and obligations.

Why This Matters

For employers, a revised wage ceiling directly affects the pool of employees who fall within mandatory PF coverage. Any upward revision expands the number of employees statutorily entitled to PF contributions, which have downstream implications for:

  • Payroll structuring and CTC calculations
  • Contribution obligations (employer and employee share)
  • Compliance audits and onboarding documentation
  • HR and finance coordination on compensation bands close to the new threshold

For employees, it means a wider segment of the workforce, those earning up to INR 25,000/month, now falls squarely within the Code’s PF protection net, assuming other eligibility conditions under the Code are met.

A Point worth Watching

The fact that this notification supersedes one issued barely four months earlier (May 2026) suggests the Ministry is actively recalibrating wage thresholds under the new social security architecture as the Code’s chapters come into fuller operation. Practitioners advising on compliance transitions especially companies still aligning HR systems to the Code’s four-code framework should treat this as a signal to monitor this notification series closely rather than treating the ceiling as static.

Practical Takeaway

Employers should audit current employee wage bands against the INR 25,000 threshold now, update PF applicability determinations accordingly, and flag this notification in payroll compliance checklists ahead of the next filing cycle.

Further, while determining eligibility and social security obligations, employers should carefully review the definition of “wages” under Section 2(y) of the Code on Wages, 2019. The provision includes basic pay, dearness allowance and retaining allowance (if any), while excluding specified components such as bonus, employer contributions to provident fund or pension, house rent allowance, overtime, commission, gratuity and certain terminal benefits. However, where excluded components (other than gratuity and retrenchment compensation/retirement benefits) exceed one half of the total remuneration, the excess amount is required to be added back to wages for statutory purposes. Accordingly, employers may also review salary structures to ensure continued compliance with the wage definition and applicable social security obligations.

Author – Navya Saxena, Associate
Co-Author – Divyanshu Rai, Intern.