EPS Pension: EPFO Mandates Membership for Employees Earning Up to ₹25,000

The Employees’ Provident Fund Organisation (EPFO) has clarified that employees earning up to ₹25,000 must join the Employees’ Pension Scheme (EPS), subject to eligibility conditions, as per news report. 

Employees earning above this amount can continue their membership if they were already EPS members. 

Eligibility for EPS Under the ₹25,000 Ceiling 

The revised wage ceiling of ₹25,000 applies to employees whose monthly wages fall within this limit for EPFO coverage.  

For new employees earning ₹20,000, mandatory EPF coverage is applicable if other eligibility conditions are met, allowing them to join EPS with the employer contributing to the pension. 

This change is crucial for workers earning between ₹15,000 and ₹25,000 who were previously outside mandatory EPFO coverage due to the old ₹15,000 ceiling. The government notified this revised ceiling on September 17, 2026. 

Employees Earning Above ₹25,000 

Employees earning more than ₹25,000 are not automatically required to join EPS. However, those who were already EPS members can continue their membership even if their wages exceed ₹25,000.  

For instance, an employee who joined under the previous ₹15,000 ceiling and later received increments raising their wages to ₹30,000 can still remain an EPS member. 

Conversely, a person earning above ₹25,000 who was not previously an EPS member is generally not required to join EPS merely due to their employment status. 

Employer's Contribution to EPS 

EPS is funded from the employer’s share of the EPF contribution, with no separate 8.33% payment from the employee's salary.  

With the revised ceiling, the maximum pension contribution is calculated at ₹25,000, increasing the employer's maximum EPS contribution from ₹1,250 to ₹2,083 per month. 

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What Employees Should Check 

Employees affected by this change should verify their basic wages and dearness allowance, ensuring it aligns with the ₹25,000 ceiling for EPFO purposes. They should also check their EPS membership status in the EPFO passbook and compare employer contributions with salary records. 

Conclusion 

The EPFO's revised wage ceiling of ₹25,000 for EPS membership affects employees earning within this range, mandating their inclusion in the scheme. Existing EPS members earning above this ceiling can maintain their membership. The employer's contribution is adjusted to the new ceiling, impacting retirement savings. 

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