EPFO Wage Ceiling Raised To ₹25,000: Cabinet Decision To Expand Social Security Coverage
In Short
The Union Cabinet has decided to increase the EPFO's wage ceiling from present ₹15,000 a month to ₹25,000 a month, which will take more workers under the mandatory provident fund, pension and insurance coverage.
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EPFO Wage Ceiling Raised To ₹25,000: Cabinet Decision To Expand Social Security Coverage
The Union Cabinet headed by Prime Minister Narendra Modi has agreed to raise the wage ceiling for compulsion coverage under the Employees' Provident Fund Organisation (EPFO) from ₹15,000 to ₹25,000 monthly salary.
The revision is expected to put over 51 lakh more people under statutory social security, and most of these are expected to be those with a monthly income of ₹15,000 and ₹25,000.
New entrants to the workforce with a basic monthly remuneration of not more than ₹25,000 will now be covered by the statutory requirements of provident fund, pension and insurance under the revised framework, subject to terms and conditions of the scheme.
The expansion will take away workers from the informal social security system.
The coverage includes:
- Employees’ Provident Fund (EPF): Provides retirement-oriented provident fund savings.
- Employees’ Pension Scheme (EPS): Offers pension benefits to eligible members.
- Employees’ Deposit Linked Insurance Scheme (EDLI): Provides insurance protection linked to EPF membership.
The change is also expected to bring the statutory contribution and pensionable-wage framework closer to prevailing wage levels.
The mandatory wage ceiling for EPF coverage was last increased in September 2014, when it was raised from ₹6,500 to ₹15,000 per month.
The latest revision comes after more than a decade and, according to the government communication, takes into account changes in wages, incomes and the expansion of formal employment.
The ceiling had remained unchanged between 2004 and 2014 before the previous revision was introduced.
The Cabinet decision is expected to extend mandatory social security coverage to more than 51 lakh workers in the ₹15,000–₹25,000 wage bracket.
This means a section of employees who previously had the option of remaining outside mandatory EPFO coverage above the existing threshold will now fall within the statutory framework, subject to applicable rules.
The move is aimed at expanding access to retirement savings, pension benefits and employment-linked insurance protection.
The latest EPFO figures cited in the government communication show approximately 7.98 crore contributing members across around 7.68 lakh contributing establishments.
The Employees’ Pension Scheme currently provides pension benefits to around 82 lakh pensioners, while the EDLI scheme offers insurance coverage linked to EPF membership.
The revised wage ceiling is therefore set to expand the pool of workers covered by India's formal social security system.
