EPFO May Lower Provident Fund Interest Rate to Between 8 and 8.2% in FY26

The Employees’ Provident Fund Organisation (EPFO) is expected to adjust the interest rate on provident fund balances for the financial year 2025‑26 and to review the wage ceiling that determines mandatory coverage. 

Proposed Interest Rate Adjustment for FY26 

As per The Economic Times report, EPFO may reduce the interest rate from the 8.25% level announced for 2024‑25 to a range of 8 to 8.2% for 2025‑26. The change is intended to preserve the fund’s corpus as the number of contributors rises under the Pradhan Mantri Viksit Bharat Rozgar Yojana.  

The Finance Investment and Audit Committee is scheduled to meet in the last week of February to finalise the rate, after which the central board of trustees will approve it and the finance ministry will ratify the decision. 

Wage Ceiling Review and Social Security Coverage 

The board is also set to discuss raising the wage ceiling that triggers mandatory PF contributions. The ceiling, unchanged at ₹15,000 since 2014, may be increased to ₹25,000 per month.  

This move follows a Supreme Court directive issued in January that urged the EPFO to expand coverage in response to rising wages and inflation. Expanding the ceiling would bring a larger segment of low and mid‑skilled workers into the social security net. 

Political Factors Influencing the Decision 

Upcoming state elections in West Bengal, Tamil Nadu, Assam, Kerala and Puducherry could affect the final outcome. Political considerations may lead the EPFO to retain the existing rate for a third consecutive year, despite the internal recommendation for a modest reduction. 

Read More: No Major EPFO Changes in Budget 2026, but EPFO 3.0 Reforms Are Lined Up! 

Implementation Timeline 

Once the central board of trustees approves the rate, the finance ministry will issue a notification and the labour and employment ministry will ensure the new rate is credited to members’ accounts by mid‑year. 

Conclusion 

The EPFO is likely to lower the provident fund interest rate to a range of 8 to 8.2% for FY26 while contemplating an increase in the wage ceiling to ₹25,000. Political developments may influence whether the proposed reduction is implemented. 

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