If your CTC did not change this year and your monthly credit still went down, you are not imagining it. Two separate rules did it, and understanding them tells you whether you have lost anything or merely moved it.
Change one, the labour codes and the 50% rule
The four labour codes came into force on 21 November 2025. Among much else, the Code on Wages defines wages so that basic pay and dearness allowance must make up at least half of your total remuneration. Many employers had kept basic pay at 30% or 40% of CTC, with the rest in allowances, precisely because provident fund and gratuity are calculated on basic pay. That is no longer allowed.
Take a ₹12 lakh package. With basic pay at 40% of CTC, your provident fund contribution is ₹57,600 a year and monthly take-home works out to ₹88,268. Move basic to 50%, as the codes require, and your contribution rises to ₹72,000, which is ₹14,400 more a year, and monthly take-home falls to ₹85,387. The difference is ₹2,881 a month.
The same change on a ₹20 lakh package costs about ₹4,219 a month in visible pay, with ₹24,000 a year going into your provident fund instead.
Change two, the EPF ceiling moved to ₹25,000
The second change arrived on 17 September 2026, when the wage ceiling for mandatory EPF coverage rose from ₹15,000 to ₹25,000 a month. The Union Cabinet approved it the previous day and it was notified in the Gazette with immediate effect. It was the first increase since 2014.
This one affects you only if your employer restricts provident fund to the statutory ceiling rather than calculating it on your full basic pay. If it does, your contribution rises from ₹1,800 to ₹3,000 a month, so ₹1,200 less reaches your account each month and ₹14,400 more goes into your fund each year. If your employer already contributes on full basic pay, which most larger firms do, nothing changes for you.
There is a second effect worth knowing. Employees earning between ₹15,000 and ₹25,000 a month who were outside the scheme are now covered, and that group also becomes eligible for the Employees' Pension Scheme.
Have you lost money?
No. In both cases the money moved from your monthly credit into your provident fund, where it earns interest and remains yours. What you have lost is the use of it today, which matters if your monthly budget is tight, and matters less if you were saving anyway.
There is a tax angle too. Under the old regime your own provident fund contribution counts towards the ₹1.5 lakh limit under 80C, so a higher contribution can reduce your tax. Under the new regime it does not, so the money goes in without any tax benefit on the way.
What to check on your payslip
First, check what your basic pay is as a share of CTC. If it is still below half, ask payroll when the structure will be revised, because the change is coming rather than optional.
Second, check which PF basis your employer uses. A deduction of exactly ₹3,000 a month means the ceiling is being applied. A deduction of 12% of your actual basic pay means it is not, and the September change does not touch you.
Third, look at September and October. Employers were given no transition period, so some started deducting at the new ceiling late. Where that happened, the employer still owes the difference from 17 September, and you may see a catch-up deduction.
Work out your own figures
Our CTC to in-hand salary calculator lets you change the basic pay percentage and the provident fund basis, so you can see exactly what each change costs you a month and where the money went. If your salary was also revised during the year, the appraisal and arrears calculator shows the month by month pattern.
This is general information and not tax advice. Last reviewed 2 October 2026.