EPS 2026 enrolment rule changed after EPFO wage hike: Govt notifies automatic pension enrolment

The notification dated September 25, 2026 has inserted a new clause into Paragraph 7 of the scheme, which defines who the pension scheme applies to. The clause covers an employee "who has been a member of the Employees' Provident Funds Scheme, 2026, but not the member of this Scheme and whose wages on the date of notification of the new wage ceiling is less than or equal to wage ceiling notified by the Central Government."

Old gap

The gap being closed by the amendment is an old one. The EPS 2026 (and the previous EPS 1995) applied to employees who became EPF members with wages not exceeding the then ceiling of ₹15,000. An earlier rule allowed an employee, who joined with wages above the ceiling, to stay out of the EPS even though the employer contributed to the provident fund. This led to a workforce of lakhs earning above ₹15,000 out of EPS.

However, the wage ceiling hike has expanded the mandatory coverage.

A recent FAQs issued by the EPFO said, "In case an existing employee is an EPF member and excluded under EPS, and his wages are in the range of 15000-25000, such employee needs to be made a member of EPS w.e.f. 17.09.2026. accordingly, his contributions towards EPS starts from 17.09.2026."

"It will be the statutory responsibility of the employer to enrol such members and start compliance for them. No application from the member is required," it added.

For those covered, the change is passive but consequential. With effect from September 17, 8.33% of the employer's contribution, computed on wages up to ₹25,000, will go to the pension fund. On ₹20,000 wages, that is ₹1,666 a month to the EPS and ₹734 to the EPF from employer's share, while the employee's own 12% will continue to go to the provident fund.