The government has implemented the EPF Scheme 2026, which has replaced the Employees Provident Fund (EPF) scheme in force since 1952. However, after the introduction of the new scheme, the question in the minds of many employees is whether they will now have to contribute more to PF than before? The answer is no. No major changes have been made in the rules of mandatory contribution of EPF in the new scheme. Employees and employers will contribute as per the prescribed rules as before. Yes, the option of additional savings through Voluntary Provident Fund (VPF) will continue as before.
What is the difference between EPF and VPF?
EPF is a mandatory retirement savings scheme for employed employees. In this both the employee and the employer have to contribute. On the other hand, VPF (Voluntary Provident Fund) is an optional facility. Under this, EPF members can deposit more amount in their PF account than the mandatory contribution as per their wish. This helps in creating a bigger fund at the time of retirement.
How much will be the EPF contribution?
Under the EPF Scheme 2026, both employees and employers will deposit 12-12% of basic salary and dearness allowance (Basic + DA) in EPF as before. At present the government has not made any change in the wage ceiling. Therefore, until a new notification is issued, the existing salary limit of Rs 15,000 per month will remain applicable.
If the salary of an employee is more than Rs 15,000, then normally EPF contribution will be made up to this limit. However, if both the employee and the employer agree, higher contributions can be made based on the actual basic salary.
You can deposit extra money in VPF
Under the new scheme, the facility for employees to make additional savings through VPF will also continue. Employees can deposit more amount in VPF than the mandatory EPF contribution as per their wish. The good thing is that the same interest is available on VPF as is available on EPF.
However, it is not mandatory for the employer to deposit an amount equal to the additional contribution made by the employee in VPF. Only if a company wishes, it can make additional contribution.
You can also reduce or stop VPF contribution if needed.
A special feature of the new system is that employees can reduce or completely stop their VPF contribution in future. Similarly, if an employer is making additional contribution voluntarily, he can also reduce or stop it under the rules.
Which option is better for retirement planning?
Financial experts believe that EPF is a strong foundation for retirement for every employed employee, as it includes contributions from both the employee and the employer. At the same time, VPF can be a good option for employees who have regular income and want to create a big retirement fund for the future. In this, interest equal to EPF is available and there is also an opportunity for additional savings. Therefore, while choosing between EPF and VPF, one should keep in mind one’s income, expenses and future financial needs.
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