Govt raises EPF wage ceiling to Rs 25,000; to benefit over 51 lakh employees

New Delhi: The Government on Wednesday approved raising the wage ceiling for mandatory coverage under the EPFO to Rs 25,000 per month from Rs 15,000 to expand access to provident fund savings and pension protection.

The wage ceiling revision is taking place after 12 years.

Follow The PSUWatch Channel on WhatsApp

The Union Cabinet decision is expected to bring more than 51 lakh additional employees within the ambit of mandatory EPFO coverage, significantly widening social security protection for workers, Information and Broadcasting Minister Ashwini Vaishnaw said at a press briefing.

"Rs 25,000 per month salary will be the new ceiling for provident fund deduction," Vaishnaw added.

Effective from Vishwakarma Day, September 17, 2026, the EPF wage ceiling has been revised from Rs 15,000 to Rs 25,000 per month, bringing more employees within the ambit of EPF social security coverage.

The Ministry of Labour and Employment said the revised ceiling will be effective from Vishwakarma Day on Thursday.

"Effective from Vishwakarma Day, 2026, the EPF wage ceiling has been revised from Rs 15,000 to Rs 25,000 per month, bringing more employees within the ambit of EPF social security coverage," the ministry said.

The Employees’ Provident Fund Organisation (EPFO) wage ceiling remained unchanged from 2004 to 2014 and was enhanced to Rs 15,000 in September 2014.

The present decision carries forward this approach by further raising the ceiling to Rs 25,000 to reflect sustained wage growth, rising incomes and continued expansion of formal employment over the intervening years, an official release said.

The annual government outgo is estimated at about Rs 11,339 crore against the existing annual budgetary support of about Rs 10,250 crore.

The estimated expenditure over five years is approximately Rs 56,696 crore.

"The (Cabinet) approval will expand access to provident fund savings, pension protection under the Employees’ Pension Scheme (EPS) and insurance protection under the Employees’ Deposit Linked Insurance Scheme (EDLI), in accordance with the applicable scheme provisions," an official release said.

It will also enable the statutory contribution and pensionable-wage framework to better reflect prevailing wage levels.

At present, a fresh employee joining employment at a wage above Rs 15,000 per month is not automatically covered under the EPF framework and may remain outside mandatory provident fund, pension and associated insurance protection.

Raising the ceiling will bring a substantial segment of employees in the Rs 15,000– Rs 25,000 wage band within the statutory social security framework, the release said.

Since the wage ceiling was last revised in September 2014, India has witnessed sustained wage growth, rising incomes and continued expansion of formal employment.

In several states and occupations, minimum wages have also moved closer to the existing threshold, the release said.

"The enhancement to Rs 25,000 therefore updates the EPFO framework in line with rising wage levels and extends the benefits of formal social security to a wider segment of the workforce," it added.

Follow PSU Watch on LinkedIN

In a post on X, Labour and Employment Minister Mansukh Mandaviya said the Cabinet decision will not only provide a broader shield of social security to the country's workers but will also accelerate the formalisation of employment.

"I want to inform all the workers of the country that tomorrow is the sacred occasion of both Vishwakarma Jayanti and Service Day. This important decision will come into effect from this auspicious day," he added.

EPFO operates one of the world’s largest social security systems, administering the Employees’ Provident Fund (EPF), Employees’ Pension Scheme (EPS) and Employees’ Deposit Linked Insurance Scheme (EDLI).

According to the latest EPFO data, about 7.98 crore contributing members across about 7.68 lakh contributing establishments, while the EPS provides pension benefits to around 82 lakh pensioners. EDLI provides insurance protection linked to EPF membership.

(PSU Watch is India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy. 👉 Click to join our channel now: PSUWatch WhatsApp Channel. Prefer LinkedIn? Follow PSU Watch on LinkedIN. Click to stay connected on Twitter here and stay updated)