Introduction

India's payroll compliance landscape is entering a new phase with the notification of the Employees' Provident Fund (EPF) Scheme, 2026, the Employees' Pension Scheme (EPS), 2026, and the Employees' Deposit Linked Insurance (EDLI) Scheme, 2026 under the Code on Social Security, 2020.

While these schemes largely retain the existing contribution structures and employee benefit framework, they introduce a more modern approach to compliance through greater digitization, streamlined administration, and enhanced governance.

For payroll, HR, and compliance leaders, understanding these developments is essential to maintaining statutory compliance, strengthening payroll governance, and ensuring employees continue to receive their entitled social security benefits.

This guide brings together three compliance updates prepared by our compliance experts into a single reference document. It provides an overview of the latest notifications covering EPF, EPS, and EDLI, helping organizations understand what has changed, what remains the same, and the practical considerations for employers.

Key Takeaways

By reading this guide, you will gain insights into:

• The transition of EPF, EPS, and EDLI under the Code on Social Security, 2020.
• The key regulatory changes introduced through the 2026 notifications.
• What remains unchanged for employers and employees.
• New digital compliance and reporting expectations.
• Employer responsibilities under the updated framework.
• Practical compliance considerations for payroll and HR teams.

What This Guide Covers

This guide includes three official compliance updates covering India's core social security schemes:

Chapter 1: Employees' Provident Fund (EPF) Scheme, 2026

Understand the transition of the provident fund framework under the Code on Social Security, 2020, including membership continuity, contribution structure, digital compliance requirements, and employer responsibilities.

Chapter 2: Employees' Pension Scheme (EPS), 2026

Explore the updated pension framework, contribution mechanisms, claim settlement timelines, digital administration, and continued protection of pension benefits.

Chapter 3: Employees' Deposit Linked Insurance (EDLI) Scheme, 2026

Learn about the modernization of the EDLI framework, electronic reporting obligations, insurance benefits, claim processing timelines, and exemption provisions.

Chapter 1: India Compliance Update: Employees’ Provident Fund (EPF) Scheme, 2026 Notified

Jurisdiction: India
Notification: G.S.R. 525(E) dated 29 June 2026
Effective Date: 29 June 2026
Legislation: Code on Social Security, 2020
Replaces: Employees’ Provident Funds Scheme, 1952.

Executive Summary

The Ministry of Labour and Employment has notified the Employees’ Provident Funds (EPF) Scheme, 2026, replacing the long-standing Employees’ Provident Funds Scheme, 1952. The new scheme has been framed under the Code on Social Security, 2020 and largely preserves the existing provident fund framework, including membership, contribution rates, and fund administration.

The primary objective of the notification is to transition India's provident fund regime to the Social Security Code framework while introducing enhanced digital compliance, updated governance provisions, streamlined administration, and modernized reporting requirements. Employers should not expect significant changes to contribution costs but should prepare for a more technology-driven compliance environment.

Key Changes

1. Transition to the Code on Social Security Framework

The EPF Scheme, 2026 supersedes the Employees' Provident Funds Scheme, 1952 and becomes the principal provident fund framework under the Code on Social Security, 2020. Existing memberships and accrued benefits continue without interruption.

Impact: This is primarily a legislative and administrative transition rather than a redesign of the provident fund system. Existing EPF-covered employers will generally continue their current obligations under the new statutory framework.

2. Membership Continuity and Expanded Coverage Provisions

The Scheme confirms that:

• Existing members under the EPF Scheme, 1952 automatically continue as members.
• New eligible employees joining covered establishments become members from the applicable date.
• Certain previously excluded or exempt employees may become eligible in accordance with the Scheme.
• International workers covered by applicable provisions remain within the EPF framework.

Impact: Organizations should review workforce classifications and ensure eligibility assessments remain aligned with the new framework, particularly for international assignees and employees covered by social security agreements.

3. Contribution Structure Largely Unchanged

The EPF Scheme, 2026 generally retains the existing contribution mechanism:

• Employer and employee contributions continue at the statutory rate.
• Mandatory contributions remain linked to the applicable wage ceiling.
• Employees may opt for higher voluntary contributions.
• Employers may make matching voluntary contributions where permitted.

Impact: No immediate increase in statutory provident fund contribution costs has been introduced. Most employers can continue existing payroll contribution practices.

4. Joint Option for Contribution on Higher Wages Continues

The Scheme allows employees and employers to jointly opt for provident fund contributions on wages exceeding the statutory wage ceiling. Such contributions may continue above mandatory levels where both parties agree.

Impact: Employers offering PF benefits on actual salary rather than limited statutory wages should review internal policies and ensure contribution practices remain appropriately documented.

5. Enhanced Digital Compliance and Reporting Framework

The Scheme places significant emphasis on electronic administration and compliance, including:

• Digital filings and returns.
• Electronic maintenance of member records.
• Technology-enabled reporting obligations.
• Greater integration with EPFO online platforms.

Impact: Organizations should ensure payroll, HR, and statutory compliance systems can meet enhanced digital reporting requirements and maintaining accurate workforce data.

6. Modernized Treatment of International Workers

The Scheme incorporates detailed provisions relating to international workers and recognizes social security agreements entered by India. It also continues special treatment for workers covered by bilateral social security arrangements.

Impact: Multinational employers should evaluate expatriate and cross-border employment arrangements to ensure compliance with applicable social security agreement provisions and exemption requirements.

7. Streamlined Provident Fund Administration

The Scheme updates governance and administrative provisions relating to:

• Powers of the Central Board.
• Duties of the Commissioner.
• Regional and local administration.
• Financial and operational management of the Fund.

Impact: While these changes are largely administrative, they are expected to improve consistency and efficiency in fund administration and regulatory oversight.

8. Simplified Withdrawal Framework

The EPF Scheme, 2026 continues to permit partial withdrawals for specified purposes and introduces a more streamlined and digital member-access framework for eligible withdrawals, subject to prescribed conditions. These may include withdrawals relating to illness, education, marriage, housing, and other eligible circumstances.

Impact: Although withdrawal claims are generally employee-driven, employers may experience reduced administrative involvement because of increased digital processing mechanisms.

9. Continued Recognition of Exempt Establishments

The Scheme preserves the framework under which establishments maintaining provident fund benefits that are at least as favourable as the statutory scheme may continue to seek exemptions subject to regulatory requirements.

Impact: Exempt establishments should review their trust governance, operational processes, and reporting obligations to ensure continued compliance under the Code framework.

The EPF Scheme, 2026 should largely be viewed as a regulatory modernization and codification exercise rather than a fundamental provident fund reform. The notification preserves the core features of the existing EPF system—including membership, contribution principles, and fund administration—while aligning the scheme with the Code on Social Security, 2020. The most significant changes relate to digital compliance, governance modernization, electronic administration, and streamlined member services. Multinational employers operating in India should use this transition as an opportunity to review payroll governance, workforce classification, expatriate compliance, and statutory reporting processes.

No material increase in EPF contribution obligations has been introduced. However, employers should prepare for a more digitally administered and compliance-oriented provident fund regime under the Social Security Code framework.

Chapter 2: India Compliance Update: Employees’ Pension Scheme (EPS), 2026 Notified

Jurisdiction: India
Notification: G.S.R. 527(E) dated 29 June 2026
Effective Date: 29 June 2026
Legislation: Code on Social Security, 2020
Replaces: Employees’ Family Pension Scheme, 1971 and Employees’ Pension Scheme, 1995 (EPS-95).

Executive Summary

The Ministry of Labour and Employment has notified the Employees’ Pension Scheme (EPS), 2026, replacing the Employees’ Family Pension Scheme, 1971 and Employees’ Pension Scheme, 1995. The new scheme transitions the pension framework to the Code on Social Security, 2020 while largely preserving the existing pension architecture, benefit formulas, contribution structure, and member entitlements.

The most notable changes are administrative and governance-focused, including enhanced digital compliance requirements, defined claim settlement timelines, continued recognition of higher pension arrangements arising from judicial and regulatory developments, and greater accountability for pension administration.

Key Changes

1. New Pension Scheme Under the Social Security Code

The EPS, 2026 has been framed under Section 15(1)(b) of the Code on Social Security, 2020, and formally supersedes the earlier pension schemes. Existing pensioners and beneficiaries will continue receiving benefits without disruption.

Impact: Represents a legislative transition rather than a substantive redesign of pension benefits. Employers covered under the EPF framework will continue pension-related obligations under the new statutory scheme.

2. Pension Contribution Framework Continues

The contribution structure remains substantially unchanged:

• Employers continue contributing 8.33% of wages (subject to the notified wage ceiling) to the Pension Fund.
• The Central Government continues to contribute 1.16% of eligible wages.
• For employees covered under the higher pension option framework, additional employer contributions continue to apply in accordance with applicable provisions.

Impact: No immediate increase in pension contribution costs has been introduced by the notification itself. Most employers are expected to continue existing payroll practices.

3. Pension Formula Largely Unchanged

The EPS, 2026 retains the existing framework for determining:

• Pensionable service.
• Eligible service.
• Pensionable salary.
• Superannuation pension.
• Early pension.
• Family pension benefits.

The scheme continues to calculate pensionable salary based on the average monthly wages during the prescribed period preceding exit from membership, subject to applicable statutory limits.

Impact: The notification does not materially alter retirement benefit calculations or pension funding liabilities for employers.

4. Continued Recognition of Long-Service Benefits

The scheme continues the concept of service-based enhancements, including the two-year weightage for members completing 20 years or more of pensionable service when calculating pension entitlements.

Impact: Employees with longer service histories continue to benefit from enhanced pension calculations, supporting retirement income adequacy.

5. Defined Claim Settlement Timelines

Significant operational change is the introduction of clear timelines for pension claim processing.

The EPFO is required to:

• Settle complete claims within 20 days, or
• Communicate deficiencies within the same period.

Further, delays without reasonable cause may attract 12% per annum interest on the delayed benefit amount.

Impact: Although the obligation primarily rests with EPFO, employers should ensure timely submission of employee records and exit documentation to minimize claim-processing delays.

6. Strengthened Digital Compliance and Administration

The new framework emphasizes electronic administration, record management, reporting, and pension processing under the Social Security Code regime. The scheme is designed to support digitized compliance, standardized reporting, and improved governance.

Impact: Organizations should review HR, payroll, and statutory reporting systems to ensure alignment with evolving EPFO digital filing and compliance requirements.

7. Continued Protection for Disablement and Family Pension Benefits

The EPS, 2026 preserves existing social security protections, including:

• Disablement pension.
• Widow pension.
• Children's pension.
• Orphan pension.
• Survivor benefits for eligible dependants.

The notification retains minimum benefit safeguards for eligible beneficiaries under these categories.

Impact: No substantive reduction or restructuring of family pension protections has been introduced.

8. Pension Fund Framework

The Pension Fund established under the previous scheme continues under the EPS, 2026 framework. The notification preserves the overall pension fund structure and investment arrangements under the Social Security Code.

Impact: No additional employer funding obligations arise from the continuation of the pension fund structure.

The EPS, 2026 is best characterized as a regulatory modernization initiative rather than a pension reform measure. While the notification transitions the pension framework to the Code on Social Security, 2020, it largely preserves existing contribution levels, pension formulas, and member benefits. The most significant developments are procedural—namely greater digitization, enhanced administrative accountability, and stricter timelines for claim settlement. No immediate increase in pension contribution obligations or material redesign of benefit entitlements has been introduced. However, employers should prepare for a more compliance-driven and digitally administered pension ecosystem under the Social Security Code framework.

Chapter 3: India Compliance Update: Employees’ Deposit Linked Insurance (EDLI) Scheme, 2026 Notified

Effective Date: 29 June 2026 (upon publication in the Official Gazette)
Notification: G.S.R. 526(E) dated 29 June 2026
Legislation: Code on Social Security, 2020
Replaces: Employees’ Deposit Linked Insurance Scheme, 1976.

Executive Summary

The Ministry of Labour and Employment has notified the Employees’ Deposit Linked Insurance (EDLI) Scheme, 2026, replacing the erstwhile EDLI Scheme, 1976 and aligning the insurance framework with the Code on Social Security, 2020. The new scheme is largely a modernization and consolidation exercise rather than a substantive overhaul of insurance benefits. It introduces a stronger digital compliance framework, updated reporting obligations, electronic contribution mechanisms, defined claim settlement timelines, and revised exemption provisions.

Key Changes:

1. New Scheme Under the Social Security Code

The EDLI Scheme, 2026 formally supersedes the EDLI Scheme, 1976 and will apply to employees of establishments covered under Chapter III of the Code on Social Security, 2020.

Impact: Primarily a legal transition from the EPF & MP Act framework to the Social Security Code framework, with no immediate change in employer coverage obligations.

2. Mandatory Electronic Contribution Payments

Employers must remit EDLI contributions and administrative charges within 15 days after the close of every month through electronic payment channels, including designated banking platforms and government-authorized digital payment systems.

Impact: Reinforces digitized compliance and reduces reliance on manual payment processes.

3. Enhanced Digital Reporting Requirements

Employers are required to:

• Employers are required to submit an initial consolidated return containing details of all employees who are eligible and required to be covered under the EDLI Scheme. The return must be furnished to the Commissioner within 15 days of the commencement of the Scheme and serves as the foundational employee database for insurance coverage administration. The requirement is intended to enable EPFO authorities to establish an accurate record of covered employees, facilitate benefit administration, and support ongoing compliance monitoring. Employers should therefore ensure that employee records, PF membership details, and workforce data are reviewed and reconciled prior to submission to avoid coverage gaps or reporting discrepancies
• Upload monthly electronic details of employees joining or leaving service.
• Provide information on eligible members through designated online portals.

Impact: Organizations should review payroll and HR systems to ensure timely electronic reporting and workforce movement tracking.

4. EDLI Benefits Broadly Continue

The core benefit structure remains substantially unchanged, including:

• Minimum assurance benefit: ₹2.5 lakh.
• Maximum assurance benefit: ₹7 lakh.
• Benefit calculations continue to be linked to an employee's average monthly wages and provident fund (PF) accumulations, subject to statutory ceilings. Under the EDLI Scheme, 2026, the assurance benefit payable upon the death of an employee is determined based on prescribed formulas that consider the employee's average PF balance during the relevant period and, in certain cases, average monthly wages. For employees who have been in continuous service during the twelve months preceding death, the benefit is generally calculated as the higher of:
• 35 times the average monthly wages (subject to the applicable wage ceiling) plus 50% of the average PF account balance, subject to prescribed caps; or
• Benefit linked to the employee's average PF balance. The scheme retains the statutory minimum benefit of INR 250,000 and maximum benefit of INR 700,000, thereby continuing the overall level of financial protection available to beneficiaries

Impact: No material increases in employer cost or employee entitlement limits under the notification.

5. Additional Protection for Certain Cases

The Scheme continues protection where an employee dies:

• While in service; and
• The EDLI Scheme, 2026 extends insurance protection to certain employees who die within six months of the last PF contribution, provided they remain on the employer's rolls. This employee-friendly provision helps preserve benefit eligibility where contribution gaps arise due to administrative, payroll, or employment-related circumstances and reduces the risk of claims being denied solely because contributions were not received immediately before the employee's death.

Impact: Helps reduce claim disputes arising from brief gaps in contributions.

6. Defined Claim Settlement Timeline

EDLI claims must be settled within 20 days of receipt of a complete claim application. A 12% per annum penal interest may apply for delayed settlement.

Impact: Encourages quicker processing and supports beneficiaries through faster claim resolution.

7. Updated Exemption Framework

Employers seeking exemption from EDLI coverage must:

• Maintain an IRDAI-approved group insurance policy with benefits at least as favourable as statutory EDLI benefits.
• Obtain majority employee consent.
• Apply for exemption/renewal at least six months prior to expiry.
• Submit prescribed monthly online returns.

Impact: Exempt establishments will face increased compliance and reporting obligations.

The EDLI Scheme, 2026 does not substantially alter benefit levels or employer contribution liability. Instead, it modernizes the administrative framework by aligning EDLI with the Code on Social Security, 2020 and introducing a more digital, compliance-driven regime. Multinational employers operating in India should expect increased emphasis on electronic filings, employee data reporting, claim administration, and governance of exempted insurance arrangements.

Conclusion

The notification of the EPF, EPS, and EDLI Schemes, 2026 marks an important milestone in aligning India's social security framework with the Code on Social Security, 2020. While the fundamental structure of these schemes remains largely unchanged, the updated framework places greater emphasis on digital administration, streamlined governance, and improved compliance processes.

For employers, this transition presents an opportunity to review payroll practices, statutory reporting processes, workforce records, and compliance readiness. Staying informed about regulatory developments and ensuring timely compliance will help organizations navigate the evolving statutory landscape with confidence.

As India's payroll ecosystem continues to modernize, payroll, HR, and compliance leaders should remain proactive in monitoring legislative updates and assessing their impact on organizational policies and processes.

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