Sections 15 and 16 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 15 of the Code on Social Security, 2020 empowers the Central Government to frame the Employees' Provident Fund Scheme, the Employees' Pension Scheme, the Employees' Deposit Linked Insurance Scheme and other schemes. Section 16 lets it establish the Provident Fund, the Pension Fund and the Deposit-Linked Insurance Fund, and sets limits on the contributions paid into them.
Section 15(1) lets the Central Government, by notification, frame the EPF Scheme, the Employees' Pension Scheme, the Employees' Deposit Linked Insurance Scheme and any other scheme for self-employed workers or other classes. Section 16 provides, in the text, that the employer pays ten per cent. of wages into the Provident Fund (twelve per cent. for establishments the Government notifies), the employee pays an equal amount and may pay more, up to 8 1/3 per cent. of wages (or a notified per cent.) goes from the employer's share to the Pension Fund, and the Insurance Fund gets not more than one per cent. of wages (or a notified per cent.). All three funds vest in and are administered by the Central Board.
Section 15: the schemes
| Clause | Scheme | Purpose |
|---|---|---|
| 15(1)(a) | Employees' Provident Fund Scheme | Provident funds for employees or classes of employees; the Government specifies the establishments or classes to which it applies |
| 15(1)(b) | Employees' Pension Scheme | (i) superannuation pension, retiring pension or permanent total disablement pension; (ii) widow or widower's pension, children pension or orphan pension; (iii) nominee pension |
| 15(1)(c) | Employees' Deposit Linked Insurance Scheme | Life insurance benefits to employees of establishments to which Chapter III applies |
| 15(1)(d) | Any other scheme | Social security benefits under the Code to self-employed workers or any other class of persons |
| 15(1)(e) | Modification | Add to, amend or vary any scheme in (a) to (d), prospectively or retrospectively |
Under s.15(2), the schemes in (a), (b) and (c) may provide for the matters in Part A, Part B and Part C of the Fifth Schedule, and under s.15(3) a scheme may take effect prospectively or retrospectively from a date it specifies.
The existing EPF Scheme 1952, the Employees' Deposit Linked Insurance Scheme 1976 and the Employees' Pension Scheme 1995 continue for a period of one year from commencement, to the extent not inconsistent with the Code, under s.164(2)(b); see sections 1 and 164. Check the current notifications for the schemes in force now. If you are unsure how a scheme applies to your establishment, our ESI and PF return filing team can confirm.
The Fifth Schedule: what a scheme may cover
| Part | Scheme | Matters (selected from the text) |
|---|---|---|
| A | Provident Fund Scheme | Who joins and exemption conditions; time and manner of contributions by employers and employees (directly or through contractors); recovery by contractors; administration charges; committees and regional offices of the board; accounts, investment, budget and audit; conditions for withdrawals, deduction or forfeiture; the rate of interest payable to members, fixed by the Central Government in consultation with the boards; nomination; registers, records and returns; identity cards; fees; contraventions punishable under s.135; further powers of Inspector-cum-Facilitators; transfer of accumulations from existing funds; life insurance premia from the Fund |
| B | Pension Scheme | Employees to whom it applies; the portion of the employer's contribution credited to the Pension Fund; accounts and investment; the scale of pension and pensionary benefits and conditions; contribution by exempted establishments; mode of disbursement; expenses from the Fund's income |
| C | Deposit-Linked Insurance Scheme | Employees covered; accounts and investment; nomination; scales of insurance benefits and conditions; manner of payment to the nominee or family member, including payment only by deposit in a savings bank account |
The Schedule is explained separately in our article on the Fifth Schedule.
Section 16: funds and contribution limits
The Central Government may establish the funds for the three schemes.
| Fund | What section 16 says |
|---|---|
| Provident Fund, 16(1)(a) | The employer's contribution is ten per cent. of the wages for the time being payable to each employee (whether employed directly or by or through a contractor). The employee's contribution equals the employer's and may exceed ten per cent. if the employee so desires; the employer is not obliged to pay more than his own contribution |
| First proviso | For establishments or classes the Central Government specifies by notification after inquiry, "ten per cent." reads "twelve per cent." at both places |
| Second proviso | The Central Government may, by notification after inquiry, specify rates of employees' contributions and the period for which they apply for any class of employee |
| Pension Fund, 16(1)(b) | Paid in from (i) sums from the employer's contribution under clause (a) not exceeding eight and one-third per cent. of wages, or such per cent. as the Central Government notifies; (ii) sums payable by exempted establishments under s.143 as the scheme specifies; (iii) sums the Central Government specifies after Parliamentary appropriation |
| Insurance Fund, 16(1)(c) | The employer pays an amount not more than one per cent. of wages, or such per cent. as notified. The employer also pays further sums, not exceeding one-fourth of his clause (c) contribution as the Central Government determines, to meet administration expenses other than benefit costs |
Under s.16(2), the Provident Fund, Pension Fund and Insurance Fund vest in, and are administered by, the Central Board as the respective schemes specify.
Reading the percentages carefully
- These are the ceilings and base rates written into the Code. The Government may notify higher, lower or different rates as provided in the section; the notifications in force decide what you actually pay. Section 16 does not itself give a wage ceiling; "wages" and the wage ceiling are defined in section 2. See our article on wages.
- The Pension Fund gets a part of the employer's provident fund contribution (not exceeding 8 1/3 per cent. of wages or as notified); it is not an additional charge on the employee.
- The Insurance Fund contribution is paid by the employer only.
Our existing post on EPF contribution rates under the old Act gives the practical background; the Code's text is the authority now.
Example. An establishment is notified for the twelve per cent. rate. For an employee whose wages are 20,000 a month, the employer's Provident Fund contribution is twelve per cent. of wages, and the employee's contribution equals it. If the employee chooses to contribute more, the employer is not required to match the extra. Out of the employer's share, a part not exceeding 8 1/3 per cent. of wages (or the notified per cent.) may be paid to the Pension Fund.
Need help with PF contributions and returns?
Getting the wage base, the applicable rate and the split between funds right is the core of monthly provident fund compliance. Our ESI and PF return filing team can help you reconcile your payroll to the notified rates. Bring your latest payroll register and contribution challans.
Key takeaways
- Section 15 empowers the Central Government to frame the EPF, Pension and EDLI schemes and other schemes for self-employed workers or classes of persons.
- The Fifth Schedule lists the matters each scheme may cover.
- Section 16 text: employer ten per cent. of wages (twelve per cent. for notified establishments); employee equal and may exceed.
- The Pension Fund takes up to 8 1/3 per cent. of wages (or notified per cent.) from the employer's share; the Insurance Fund up to one per cent. (or notified per cent.).
- The Central Board administers all three funds.
Read next
- Sections 17, 18 and 19: contribution, tax status and priority of PF dues
- Sections 13 and 14: additional functions and officers of the Central Board
- Fifth Schedule: matters for schemes
- EPF Scheme 1952: how your PF accumulates
Disclaimer: Based on the Code on Social Security, 2020 (as enacted) and, where noted, the Code on Social Security (Central) Rules, 2026 (G.S.R. 344(E), 8 May 2026), as on 30 September 2026. The Code is in force from 21 November 2025; some provisions may be notified later, and State Governments make their own rules for establishments where the State is the appropriate Government. Verify the current position before acting.