Govt Notifies 8.33% Employer Contribution to Pension Fund

The Central Government has notified 8.33% of wages as the rate of contribution payable every month by the employer to the Pension Fund established under the Code on Social Security, 2020.

The notification has been issued in exercise of powers conferred under Section 16(1)(b)(i) of the Code and is effective from the commencement of the Employees’ Pension Scheme, 2026, i.e., June 29, 2026.

1. Employer Contribution Rate Fixed at 8.33%

The Government has prescribed that employers shall contribute 8.33% of the wages payable to employees every month to the Pension Fund.

This contribution will form part of the pension framework established under the Code on Social Security, 2020.

2. Contribution to Pension Fund

The notified contribution is payable to the Pension Fund established under the Code.

The Pension Fund is intended to support pension and related benefits payable to eligible employees under the Employees’ Pension Scheme, 2026.

3. Legal Basis of Notification

The notification has been issued under Section 16(1)(b)(i) of the Code on Social Security, 2020.

This provision empowers the Central Government to notify the rate of contribution payable by employers towards the Pension Fund.

4. Effective Date

The notified contribution rate is effective from the commencement of the Employees’ Pension Scheme, 2026.

Accordingly, the 8.33% employer contribution rate applies from June 29, 2026.

5. Applicability to Employers

Employers covered under the pension provisions of the Code on Social Security, 2020, will be required to make monthly contributions at the prescribed rate.

The contribution must be calculated with reference to the wages payable to eligible employees.

6. Objective of the Notification

The notification seeks to:

• Prescribe the employer contribution rate for the Pension Fund;
• Operationalise the Employees’ Pension Scheme, 2026;
• Ensure regular monthly funding of pension benefits;
• Provide clarity to employers regarding pension contribution obligations; and
• Support implementation of the pension framework under the Code on Social Security, 2020.

7. Key Takeaway

The Central Government has notified 8.33% of wages as the monthly contribution payable by employers to the Pension Fund under the Code on Social Security, 2020. The rate applies from June 29, 2026, being the date of commencement of the Employees’ Pension Scheme, 2026.

Click Here To Read The Full Notification