HR & payroll glossary

What is PF?Employees' Provident Fund (EPF)

PF (EPF) is India's mandatory retirement savings scheme run by EPFO, funded by employee and employer contributions of 12% of PF wages each.

Definition

The Employees' Provident Fund is a statutory retirement savings scheme administered by the Employees' Provident Fund Organisation (EPFO). Covered establishments deduct the employee's share from salary, add the employer's share, and remit both every month through an Electronic Challan cum Return (ECR).

How it works

Employee contribution: 12% of PF wages (basic plus dearness allowance).
Employer contribution: 12% of PF wages, of which 8.33% goes to the Employees' Pension Scheme (EPS) on wages up to ₹25,000 (a maximum of ₹2,083 a month) and the balance to EPF.
The wage ceiling is ₹25,000 a month from 17 September 2026 (it was ₹15,000). Employees earning up to ₹25,000 must be covered; employers may contribute on actual wages above the ceiling.
Employers also pay EDLI (0.5%, on wages up to ₹25,000) and EPF administration charges (0.5%).
Each member has a Universal Account Number (UAN) that stays with them across employers.

Why HR and payroll teams care

PF is due monthly, is audited by EPFO, and attracts interest and damages when paid late. The choice of PF basis (capped at ₹25,000 or on actual basic) also changes take-home pay and cost to company, so it must be applied consistently.

Example

Basic of ₹30,000, contribution capped at ₹25,000

Employee PF: 12% × ₹25,000 = ₹3,000
Employer EPS: 8.33% × ₹25,000 = ₹2,083
Employer EPF: ₹3,000 − ₹2,083 = ₹917
Total remitted to EPF and EPS: ₹6,000, plus EDLI and admin charges