EPFO Likely to Raise Wage Ceiling to ₹25,000 for PF and Pension Coverage

The EPFO is planning to increase the wage ceiling for mandatory coverage under the EPF and EPS to ₹25,000 per month, as per Moneycontrol news reports. The proposal aims to expand the reach of India’s social security network to millions of additional workers.

Current Rules and Proposed Change by EPFO

At present, the wage ceiling for mandatory inclusion under EPFO schemes is ₹15,000 per month. Employees earning more than this amount in basic pay can choose to opt out, and employers are not legally required to register them under EPF and EPS.

The proposed revision would increase the limit by ₹10,000, making it mandatory for employees earning up to ₹25,000 per month to be covered under the EPF and EPS.

Both employers and employees contribute 12% each of the employee’s salary every month. Of the employer’s share, 8.33% goes to the EPS and 3.67% to the EPF.

Broader Impact

According to internal assessments by the labour ministry, this change could bring over 10 million more workers into the fold of social security benefits. Labour unions have long demanded a higher wage limit, arguing that the current ceiling no longer reflects rising wage levels, especially in metro cities.

A higher ceiling would not only enhance social protection but also lead to a larger EPF and EPS corpus. This, in turn, could improve retirement benefits and increase pension payouts for employees over time.

Currently, the EPFO manages a total corpus of around ₹26 lakh crore, serving approximately 76 million active members.

Benefits and Challenges

The move is seen as a progressive step toward expanding financial security and aligning statutory limits with current salary trends. It would ensure that more workers have access to long-term savings and retirement protection.

However, some employees may resist the change since higher contributions reduce in-hand salaries. Employers, too, might face increased compliance and statutory costs.

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Conclusion

If approved, the EPFO’s proposal to raise the wage ceiling to ₹25,000 per month will mark a major policy step toward strengthening India’s social security framework. The move aims to balance employee welfare with formal sector growth, ensuring that a larger section of the workforce gains from retirement and pension benefits in the years ahead. 

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