What is EPF (Employees' Provident Fund)?
Last updated: 27 June 2026
EPF (Employees' Provident Fund) is a mandatory, government-regulated retirement savings scheme in India where both the employee and the employer each contribute 12% of the employee's basic salary and Dearness Allowance (DA) every month into an individual provident fund account.
Governed by the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (now also under the Code on Social Security, 2020), EPF applies to every establishment with 20 or more employees, and continues to apply even if headcount later drops below 20.
Contribution breakdown
| Contributor | Rate | Where it goes |
|---|---|---|
| Employee | 12% of Basic + DA | Employee's EPF account (Account 1) |
| Employer | 3.67% of Basic + DA | Employee's EPF account (Account 1) |
| Employer | 8.33% of Basic + DA | Employees' Pension Scheme — EPS (Account 10), capped at ₹1,250/month |
| Employer | 0.50% of Basic + DA | EDLI insurance (Account 21), capped at ₹75/month |
| Employer | 0.50% of Basic + DA | Admin charges (Account 2), minimum ₹500/month per establishment |
Fact box. The EPF wage ceiling is ₹15,000/month (as of mid-2026). The EPS pension contribution (8.33%) is capped at this ceiling — maximum ₹1,250/month goes to EPS, and only the balance (3.67%) flows to the EPF account. The Supreme Court has directed a review of the ceiling; a hike to ₹21,000 is under consideration but not yet notified, so ₹15,000 continues to apply until a notification issues.
Compliance requirements
- ECR (Electronic Challan cum Return): Filed and paid by the 15th of the following month on the EPFO unified portal (unifiedportal-emp.epfindia.gov.in).
- UAN (Universal Account Number): Each employee gets a portable UAN that stays with them across jobs.
- Labour Code impact: Under the Code on Wages (effective 21 Nov 2025), "wages" must be at least 50% of CTC. Since EPF is calculated on wages, a higher wages base increases the EPF contribution for many employees.
Frequently asked questions
Can an employee voluntarily contribute more than 12%? Yes. Employees can opt for Voluntary Provident Fund (VPF) contributions above 12% — no employer matching required. VPF earns the same interest rate as EPF and qualifies for Section 80C deduction under the old tax regime.
What if an employer has fewer than 20 employees? EPF coverage is mandatory only at 20+ employees. However, establishments with fewer employees can voluntarily register. Once covered, coverage continues even if strength falls below 20.
Sources: EPFO — epfindia.gov.in; Code on Social Security, 2020
General information, not professional advice. Verify on the official portal for your case. Reviewed by a Chartered Accountant; last updated 27 June 2026.
Related: ESI (Employees' State Insurance) · Gratuity · Professional Tax