On 17 September 2026, the Ministry of Labour & Employment notified (S.O. 5109(E)) an increase in the EPF wage ceiling from ₹15,000 to ₹25,000 per month, effective immediately. It’s one of the biggest changes to PF coverage in years, and every HR and finance team needs to plan for it.

Many companies are already working out the extra cost. Fewer are looking at a government scheme that can reduce hiring costs and build their talent pipeline: the National Apprenticeship Training Scheme (NATS).

What the PF change means for employers

Until now, employees earning above ₹15,000 a month were outside mandatory PF coverage. With the ceiling at ₹25,000, a large share of the workforce, especially entry-level and junior staff, now falls under compulsory PF.

For employers, this means:

• Higher contributions on a larger wage base
• More employees covered, so a bigger monthly PF outgo
• Higher cost per new hire, which matters most to companies that hire freshers in volume

For employees, it’s good news: more retirement savings, a higher pension, and interest at 8.25%. But companies now need to plan their hiring costs more carefully.

Enter NATS: an underused opportunity

NATS is a Government of India scheme, run through the Boards of Apprenticeship Training, that lets companies train fresh graduates and diploma holders as apprentices for up to one year.

Many companies, particularly in IT, have never used it. Some don’t know it exists. Others assume it’s only for manufacturing, or expect too much paperwork. None of that holds up anymore.

Why NATS makes sense now

1. Government stipend support. The government shares the stipend cost, up to ₹9,150 per apprentice per month, and pays its share directly to the apprentice through DBT. This lowers the effective cost of each trainee.

2. No PF or ESI on apprentice stipends. Apprentices engaged under the Apprentices Act, 1961 are not “employees” under social security law. Their stipend doesn’t attract PF or ESI contributions. With PF costs rising, that gap matters more than ever.

3. A pre-trained talent pipeline. You get a year to train freshers on your own tools, processes and culture. Then you can absorb the best performers as full-time employees, already productive from day one.

4. Statutory compliance. Establishments with 30 or more employees are required to engage apprentices in a prescribed band (2.5% to 15% of the workforce). NATS helps you meet this obligation.

5. Works for IT and services. NATS covers graduates in engineering, commerce, science, arts and management, and diploma holders. That includes software trainees, support engineers, QA, data operations, finance and HR roles.

Doing it right

To get the full benefit and stay compliant:

• Use NATS for fresh hiring, not to reclassify existing employees. Eligibility is limited to recent pass-outs without significant work experience. Converting current staff into apprentices can be treated as PF avoidance and lead to penalties.
• Register correctly on the NATS portal and issue proper apprenticeship contracts.
• Pay stipends on time and file claims properly so the government support comes through.
• Provide real training, not just regular work under a different label.

The bottom line

The new PF ceiling is here to stay, and it will raise the cost of building a young workforce. Companies that plan their fresher hiring through NATS can manage that cost, stay compliant, and build a trained talent pool at the same time.

Want to know how NATS fits your hiring plan? Vasudhaiva Accountants handles everything end to end: portal registration, contracts, onboarding, stipend claims and compliance.

📞 Call or WhatsApp: +91 63588 75915
📧 Email: ketan@vasudhaivaaccountants.com