EPF Scheme 2026 in plain words: what replaced the 1952 Scheme

If you opened an EPFO notice recently and the paragraph numbers looked wrong, they are not. The EPF Scheme 2026 replaced the 1952 Scheme this year, and most of the familiar rules now sit under new numbers.

Nothing dramatic changed in how PF is calculated. But offer letters, PF policies and payroll settings that quote "para 26(6)" or "para 29" are now quoting a scheme that no longer exists. This post is the conversion table we wish we had in July, with a few practical notes on the parts that matter month to month.

What the EPF Scheme 2026 is, and when it started

The Employees' Provident Funds Scheme, 2026 was notified as G.S.R. 525(E) on 29 June 2026. It is made under the Code on Social Security, which came into force on 21 November 2025 and repealed the old EPF Act with savings clauses. The scheme came into force on publication; one advisory note puts the start at 1 July 2026.

So yes, the EPF Scheme 1952 is replaced. Contributions, the ECR, interest and damages all continue. What you need to change is mostly paperwork: references, policy wording and the labels in your payroll tool.

The paragraphs payroll teams actually use

Print this and stick it near whoever handles PF queries. It saves a surprising amount of time.

Contributions: paragraph 18

Paragraph 18 keeps the 12% structure. Two lines in it are worth reading closely.

• 18(3): contributions are subject to the wage ceiling. Where a member's monthly wage is above the ceiling, "the employer and employee's contribution shall be limited to the contribution payable on the wage ceiling". The ceiling has been ₹25,000 since 17 September 2026; we covered that change in the PF wage ceiling post.
• 18(4): contributions are worked out on "wages actually drawn or payable during the month". This is the hook for two awkward cases: back-dated arrears and a final salary paid late. Both are explained in PF on salary arrears and PF on a late full and final settlement.

Joint option above wage ceiling: paragraph 9(4)

Above the ceiling there are two common patterns, and the 2026 Scheme gives each its own paragraph.

Both sides contribute on actual wages. This needs a joint option of employer and employee, now under paragraph 9(4). Companies that offer "PF on full basic" as a benefit use this route.

Only the employee goes above the ceiling. Under paragraph 19, an employee may contribute voluntarily at the statutory rate or more, on wages above the ceiling. The employer is under no obligation to match (19(2)), but it does pay admin charges on those wages (19(3)).

A quick example. Meera is a design engineer in Bengaluru on ₹60,000 basic. Her company keeps its share at 12% of ₹25,000, which is ₹3,000. She wants PF on her full basic, so she contributes 12% of ₹60,000, which is ₹7,200. The employer's ₹3,000 stays as it is, EPS is capped at ₹2,083, and admin charges are worked out on the full ₹60,000 of EPF wages. EDLI stays on wages up to the ceiling.

Write down which pattern applies to whom. Most disputes we see come from a joint option nobody can find on file.

Voluntary provident fund rules: paragraph 19

Voluntary PF (VPF) now has a clear home, and three voluntary provident fund rules are worth knowing:

1. There is a ceiling on how much. The proviso to paragraph 19(1) says a voluntary contribution cannot be more than the wages left after the deductions the Code on Wages allows. That law caps total deductions at 50% of wages. So an employee cannot opt for VPF that pushes total deductions past that line.
2. Either side can stop it. Paragraph 19(4) lets the employer or the employee reduce or stop voluntary contributions at any time.
3. EPFO does not compute VPF. The employer puts the total employee share, statutory plus voluntary, in the EE column of the ECR.

On arrears, the scheme is silent. Common practice is that a percentage election ("20% of PF wages") applies to arrears of the months it covers, and a fixed monthly amount does not grow with them. Put whichever reading you follow on the VPF form so employees know.

PF damages for late payment: paragraph 23

The due date is unchanged: within 15 days of the close of the month, so the 15th of the next month (paragraph 28(3)). Pay late and two things run from that date.

• Interest, at 12% a year, worked out per day. On ₹2,00,000 of contributions paid 45 days late, that is ₹2,00,000 × 12% × 45/365 = about ₹2,959.
• Damages, now under paragraph 23. As read in a copy of the scheme, they are graded by how long the delay runs. We have not seen the official Gazette table, so treat any figure from a summary with care.

You do not have to compute either by hand. The EPFO portal works out interest and damages when you pay a late challan. What you can do is keep payroll locked by the 10th, so the 15th is never at risk.

What to update this quarter

A practical list:

1. Policies and letters. Replace "para 26(6)" with "para 9(4) of the EPF Scheme 2026 (earlier para 26(6))". Same for 29, 32 and 38.
2. Joint option forms. Keep signed copies for everyone contributing above the ceiling on both sides.
3. VPF forms. Add a line on whether a percentage election covers arrears, and a note on the 50% deduction cap.
4. Payroll labels. If your tool shows paragraph numbers next to settings, they should show both old and new. Vatsin Payroll labels the PF options with the 2026 paragraphs alongside the old ones, so a CA reading a settings screen does not have to translate.
5. Interest and damages. Brief whoever pays challans that the portal adds them automatically, and that the number grows by the day.

None of this is hard. It is the kind of change that sits quietly until an inspector, an auditor or a former employee quotes a paragraph back at you. Better that your documents already speak the new numbering.