How Wage Ceiling works
PF has a wage ceiling of ₹25,000 a month from 17 September 2026 (₹15,000 before that): employees with PF wages up to it must be covered, and the pension (EPS) share is capped there. ESI has a ceiling of ₹21,000, above which an employee is not newly covered. Contributions and coverage are decided by comparing the wage to these ceilings.
Why Wage Ceiling matters
Wage ceilings decide who is covered and how much is contributed, so applying the wrong ceiling is a common source of PF and ESI compliance errors.
Why wage ceilings cause payroll errors
Wage ceilings are a frequent source of mistakes because the PF and ESI limits are different and behave differently. The PF ceiling, ₹25,000 from 17 September 2026, decides who must be covered and caps the pension share, but PF can still be paid on a higher basic if the employer chooses. The ESI ceiling of ₹21,000 also decides coverage, in its own way: cross it and a worker generally leaves the scheme, but only from the next contribution period, not mid-period. For a staffing firm running payroll for hundreds of workers whose wages sit near these limits, applying the right ceiling to each worker is exactly the kind of check that software automates and manual payroll gets wrong.
Frequently asked questions
What is the PF wage ceiling?
₹25,000 a month from 17 September 2026; it was ₹15,000 from September 2014 until then. Employees with PF wages up to this figure must be enrolled, and the pension (EPS) share of PF is calculated only up to it, though PF itself can be paid on a higher basic.
What is the ESI wage ceiling?
₹21,000 a month. Employees earning above this are generally not newly covered by ESI.