By Mayank Kulshrestha | AGM – Human Resources, Reliance Retail | About the author | 29 September 2026
The circular explained the three-step split in theory. Here is what it looks like once payroll actually runs it.
For employees who were restricted to the old Rs 15,000 ceiling, the deduction stays on that base through 17 September. From 18 September to 30 September — the remaining 14 days of the month — the deduction shifts to the Rs 25,000 base. Where an organisation also grosses up the employer share in step with the revised ceiling, that increase follows the same proportion for the same 14-day period.
The practical effect for most employees in this band: the hit to in-hand salary this month lands on only 14 days, not the full month. From October onwards, the deduction runs on the new ceiling for all 30 or 31 days, and the full impact shows up on every payslip from there.
This is where most of the confusion is going to come from in the next few weeks.
Why the September Payslip Looks Smaller Than Expected
An employee checks their September salary and sees a lower net pay than usual. The instinct is to assume something has gone wrong — a payroll error, a missed allowance, something to flag to HR immediately.
Nothing has gone wrong. The lower net pay is the employee’s own PF contribution increasing, because their statutory wage ceiling increased mid-month. The money has not vanished. It has moved from take-home pay into the employee’s own PF account, with a matching employer contribution sitting alongside it.
That distinction needs to reach employees before the payslip does, not after the first confused message lands in HR’s inbox.
The Line Worth Repeating to Anyone Who Asks
A smaller net number this month does not mean a smaller total compensation. It means a larger share of the same compensation went into a retirement account instead of the bank account.
The 14-day partial month is actually the gentler version of this transition. October is where employees feel the complete effect, because the entire month runs on the Rs 25,000 base. Anyone who found the September reduction manageable should be told clearly that October’s reduction will be larger, proportionally, because it is no longer split across two ceilings.
What This Means for the Employer’s Numbers Too
The employer share does not stay flat while the employee share increases. Both sides of the contribution move together, because both are calculated as a percentage of the same statutory wage ceiling. An employer carrying a large population in the Rs 15,000-25,000 band is not looking at a one-time adjustment. They are looking at a permanently higher monthly PF outgo from October onwards, calculated across every employee who was previously capped at the lower ceiling.
This is the number that deserves a proper projection, not a rough estimate. The September partial month is a preview. October is the actual run rate.
What HR Should Communicate Now, Not After the Questions Start
- Explain the two-ceiling September split before the payslip goes out. A short note — even two lines — explaining that September has two different deduction periods saves a dozen individual conversations later.
- Separate the September number from the October number when you communicate. If people only hear about September’s smaller impact, October’s full impact will feel like a second, unexplained cut.
- Reframe the deduction as a destination, not a loss. The money is going into the employee’s own PF balance. Say that explicitly, every time.
- Give finance the October run rate early. The employer-side cost increase is now permanent and should be in the budget conversation, not discovered in the October payroll run.
The wage ceiling changed on a government timeline. How clearly people understand what happened to their own payslip is entirely on HR’s timeline.
Read next: EPFO Wage Ceiling Raised to Rs 25,000: Who Is Impacted
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