VISHWAS 2026: The ₹25,000 PF Ceiling and Its Impact on September Payroll

By Pratik Vaidya

The wage ceiling for the Employees’ Provident Fund (EPF) increased from ₹15,000 to ₹25,000 on September 17. This immediately posed a critical question for payroll teams: what happens to September payroll if system updates are implemented only from October 1?

At the same time, the Employees’ Provident Fund Organisation (EPFO) introduced VISHWAS 2026, a scheme to resolve certain longstanding disputes over PF damages. This raises another question: can employers use VISHWAS to avoid interest or damages resulting from a shortfall in September contributions?

The answer is no. These two developments address different issues and different periods. VISHWAS is designed to resolve eligible older disputes. It is not a grace period for implementing the new wage ceiling.

What does the September change mean?

The notification dated September 17 increases the wage ceiling under Chapter III of the Code on Social Security, 2020. It takes effect from the date of its publication in the Official Gazette.

Employers should not assume that October 1 is the legal start date simply because payroll systems or internal processes will be updated then. The change takes effect from September 17. Employers must determine whether their establishments and employees are affected and how contributions should be calculated for September.

There is, however, a practical issue. The notification specifies the effective date and the new monthly ceiling, but does not give a clear formula for dividing September wages or contributions between the periods before and after September 17. Employers should not present a partial-month calculation as though the notification expressly provides for it. They should consult EPFO guidance, document the methodology used and seek expert advice where the treatment is unclear.

It is also important to distinguish a possible contribution shortfall from the timing of any late payment. If an additional contribution is due for September, any interest or damages will depend on the due date, the amount owed and the circumstances of the case. VISHWAS does not address this issue.

What is VISHWAS actually for?

VISHWAS 2026 is a one-time scheme to settle eligible disputes over PF damages. The Government notified it on June 29, 2026, through G.S.R. 525(E), as part of the Employees’ Provident Funds Scheme, 2026. EPFO issued operational guidance on July 9, and the Ministry explained the scheme publicly on July 17.

The June notification created the scheme. The July circular explained how EPFO offices should process applications.

VISHWAS applies to damages for defaults relating to periods before June 14, 2024. It does not address contribution issues arising from the September 2026 change, even if those issues later lead to a damages dispute.

When PF contributions are delayed, employers may face two separate payments. Interest compensates for the delay; damages are an additional amount imposed for the default. Under the earlier EPF law, these were governed by Sections 7Q and 14B. Under the Code on Social Security, they are covered by Sections 127 and 128.

VISHWAS can reduce damages in eligible cases. It does not eliminate the PF contribution itself or the statutory interest.

Who can apply, and what must be paid?

The scheme covers four broad categories of cases:

1. A damages order is being challenged before a court or tribunal.

2. A final order has been issued, but the damages remain unpaid or have been only partly recovered.

3. EPFO has issued a notice, but has not passed a final order.

4. The default is identifiable, but a damages notice has not yet been issued.

For eligible defaults, damages are recalculated at reduced monthly rates:

Period of delay     Rate of damages
Up to 2 months     0.25% per month
From 2 months to less than 4 months     0.50% per month
Four months or more     1.00% per month

Employers must first pay the full applicable interest under Section 7Q of the earlier Act or Section 127 of the Code, as relevant. They must also agree not to pursue any further appeal after settlement.

That is why VISHWAS is not a complete waiver. It offers a lower damages calculation for qualifying cases, subject to conditions. If an employer has already made a partial payment towards damages, that amount will be taken into account. If the payment is less than the recalculated amount, the difference remains due. If it is more, the excess will not be refunded or applied to another PF obligation.

Cases where damages have already been fully recovered are not eligible. The scheme also excludes cases involving fraud, misappropriation or deliberate falsification of records. Employers who have not paid the full applicable interest cannot meet a key condition of the scheme.

Why employers should review old cases now

Applications can be made online through the EPFO Employer Portal using a digital signature or e-sign facility. After EPFO sends the recalculated damages, the employer must pay within the time allowed. A settlement certificate is issued after payment, and the settled dispute cannot be pursued further.

Employers should first sort their old PF issues by period and status. Is there a notice? A final order? An appeal? A recovery certificate? Has the interest been paid in full? The answers will help determine whether a case may qualify for VISHWAS.

The September payroll review is a separate exercise. Employers should identify employees affected by the change, decide how September contributions should be recorded, verify the remittance due date and keep a record of the calculations. October 1 should not be treated as a safe harbour simply because the payroll system is updated then.

The September ceiling change and VISHWAS address different concerns. One requires employers to apply the new rule; the other offers a way to settle certain eligible cases involving old damages. Employers may therefore need to assess a possible liability for September while separately reviewing an older damages case.

The Ministry reminded employers on September 3 that VISHWAS will close on December 28, 2026. Employers with outstanding notices, unpaid damages orders or pending cases should check their records well before the deadline. The September ceiling change should be handled separately. VISHWAS cannot be used to cover new contributions, interest or damages arising from the September 2026 change.