Late PF Payment: Interest and Damages for Employers (2026)
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If PF dues are paid after the 15th, the employer owes interest at 12% a year (old Section 7Q, now Section 127 of the Code) and damages (old Section 14B, now Section 128). For defaults from 14 June 2024 damages are 1% a month; older defaults attracted up to 25% a year, but can be settled more cheaply under VISHWAS 2026 until 28 December 2026.
Two separate charges
| Charge | Law | Rate | Can it be reduced? |
|---|---|---|---|
| Interest | Section 7Q (1952 Act) / Section 127 (Code) | 12% a year, simple, for the days of delay | No. It must be paid in full, including before VISHWAS |
| Damages | Section 14B (1952 Act) / Section 128 (Code) | Depends on when the default happened (below) | For old defaults, through VISHWAS 2026 |
Damages by period of default
Defaults on or after 14 June 2024
Damages are 1% a month of the arrears (12% a year), for each month of delay. With interest, a delay costs about 24% a year.
Defaults before 14 June 2024
| Period of delay | Old damages rate | Under VISHWAS 2026 |
|---|---|---|
| Up to 2 months | 5% a year | 0.25% a month |
| 2 to 4 months | 10% a year | 0.50% a month |
| 4 to 6 months | 15% a year | 1% a month |
| More than 6 months | 25% a year | 1% a month |
With 12% interest, the old regime could reach 37% a year. See VISHWAS 2026 before 28 Dec 2026.
Estimator
Estimate interest and damages on one month's dues
How EPFO recovers it
- Late payment of a month's dues
- Interest computed; notice for damages
- Reply and hearing: give reasons and records
- Order on damages
- Recovery if unpaid (bank attachment and other steps)
- Reply to every notice by the date given, with payroll, bank and ECR records.
- Reasons beyond your control (for example a proven financial crisis) can be raised at the hearing; the officer decides.
- Not depositing employees' share that was deducted from wages is a serious offence that can lead to prosecution.
Related guides on our other websites
Sources
- PIB, 17 Jul 2026: VISHWAS 2026 (Sections 7Q/127 and 14B/128; VISHWAS rates for defaults before 14 Jun 2024).
- PIB, 3 Sep 2026: VISHWAS 2026 open until 28 Dec 2026 (normal rules up to 37% a year).
- PIB, 15 Jul 2026: VISHWAS rates against the standard rate of up to 25% a year.
- EPFO: Wage ceiling FAQs (due date of the 15th; interest and penalty for late payment).