Every salaried employee in India has heard the term PF at some point, usually right after their first payslip shows a deduction they did not expect. But who actually has to be enrolled? And who can skip it? The rules changed this year with the rollout of the EPF Scheme, 2026, so it is worth going through them properly rather than relying on what your HR team told you two years ago.
What counts as PF, quickly
The Employees' Provident Fund (EPF) is India's main retirement savings scheme for salaried workers, run by the Employees' Provident Fund Organisation (EPFO). Both employee and employer put in a percentage of wages every month, and the money sits there earning interest until retirement, job loss, or a few other qualifying events.
On 29 June 2026, the government replaced the old EPF Scheme of 1952 with a new one, aligned to the Code on Social Security, 2020. The contribution math did not really change. The eligibility framework and withdrawal categories did.
Who has to register: the employer side
An establishment must register for EPF once it employs 20 or more people. This includes factories, shops, hotels, hospitals, IT companies, and over 180 other classes of business notified under the Act. The headcount is not limited to full-time staff on your own payroll either. Contract workers, part-timers and temporary employees all count toward that 20.
Once a business crosses the threshold, registration is compulsory, not optional. Smaller businesses under 20 employees can register voluntarily under Section 1(4) if they want to offer PF as a benefit, and here is the part people miss: once they do, that coverage sticks. There is no un-registering later because headcount dropped.
Newly registered establishments with fewer than 20 employees get a break too. They can contribute at a reduced 10 per cent rate instead of 12 per cent for their first three years, along with a few specific industries such as jute, beedi, brick and coir that get the same concession regardless of size.
Who is eligible as an employee
This is the part most people actually search for. An employee becomes eligible for mandatory PF membership if:
- Their establishment is registered under the Act, and
- Their basic wage plus dearness allowance is ₹15,000 or less per month at the time of joining
That ₹15,000 ceiling has not moved since September 2014, and the 2026 scheme left it untouched. If you are hired at a salary above that figure, you are technically an "excluded employee" for mandatory purposes. You can still join, but only if you and your employer both agree to it voluntarily.
The ceiling only applies at the point you join a covered establishment. Nobody kicks you out of PF for earning too much once you are already in the system.
So if you are already an EPF member earning above ₹15,000 and you get a raise, you stay a member.
The international worker exception
If you are a foreign national working for a PF-covered employer in India, different rules apply, and they are stricter rather than looser. International workers are covered without the ₹15,000 ceiling, meaning contributions are calculated on full salary. The one carve-out is a Social Security Agreement (SSA) between India and the worker's home country. If one exists and applies to the individual, they can be exempted or get treaty-based benefits instead. The UK agreement is specifically named in the new scheme, alongside several others already in force.
There has been some back-and-forth this year about whether the wage ceiling should apply differently for international workers. As of now, EPFO's position is that it does not. The ceiling determines eligibility for Indian workers; for international workers, coverage is tied to whether an SSA applies, not to salary level.
What actually changed in 2026
If you already understood the old rules, here is what is genuinely new rather than repackaged.
Withdrawal categories got simpler. Thirteen withdrawal categories collapsed down to three broad ones: essential needs, housing, and special circumstances. Medical emergencies still require no minimum service period. Marriage and education withdrawals still need seven years of membership.
A minimum balance rule now applies. Members must keep at least 25 per cent of their PF balance untouched until final settlement, which happens at retirement (55+), permanent disability, retrenchment, voluntary retirement, or permanent migration from India.
Pension withdrawal waiting period got longer. Previously you could withdraw your EPS pension benefit after just two months of unemployment. Under the 2026 rules that is now 36 months. This is the change generating the most complaints, understandably, since two months to three years is a big jump for anyone counting on that money between jobs.
Claims move faster on paper. EPFO must now settle claims within 20 days, with personal penalties for the responsible Commissioner if they do not. The auto-settlement limit for claims without manual approval also went up from ₹1 lakh to ₹5 lakh.
Filings are electronic only. Employers file Form V within 15 days of the scheme applying to them, and monthly returns within 15 days of month-close. Nil returns are required even when there is nobody new to enrol.
Quick eligibility checklist
For an employee to be covered mandatorily:
- Employer has 20 or more workers, or has voluntarily registered under Section 1(4)
- Employee's basic wage plus DA is ₹15,000 or less at the time of joining
- Employee is not already exempted through an approved private PF trust with equivalent or better benefits
If any of those conditions is not met, you can still get coverage, but it needs mutual consent between you and your employer rather than automatic enrolment.
Frequently asked questions
Is PF mandatory if my salary is above ₹15,000?
Not automatically. You are classified as an excluded employee, but you can be enrolled voluntarily if your employer agrees.
Does a company with 15 employees need to register for PF?
Not compulsorily. But once it registers voluntarily, it cannot withdraw from the system later.
Do contract and part-time workers count toward the 20-employee threshold?
Yes. The principal employer is responsible for their PF compliance too, even if a contractor handles the payroll.
What happens to my PF eligibility if I get a raise above ₹15,000 after joining?
Nothing changes. You keep your membership regardless of how much you earn afterward.
Are foreign employees in India covered under PF?
Generally yes, on full salary, unless a Social Security Agreement between India and their home country provides an exemption.
The core eligibility test has not really moved since 2014: headcount and starting salary. What changed in 2026 is mostly what happens after you are in the system, particularly around withdrawals and pension timing. If you are an employer figuring out whether you have crossed the threshold, or an employee wondering whether that ₹15,000 line applies to you, those two questions are still where to start.
