In a move that could expand the social security net for millions of salaried employees, the Employees’ Provident Fund Organisation (EPFO) is likely to raise the wage ceiling for mandatory Provident Fund (PF) and Pension Scheme (EPS) coverage from the existing ₹15,000 to ₹25,000 per month, according to sources close to the development.
The proposal—long demanded by labour unions—is expected to be tabled in the next Central Board of Trustees (CBT) meeting scheduled for December or January, where a final decision could be taken.
Who Will Benefit from the Revision?
Currently, only employees earning up to ₹15,000 in basic monthly salary are mandatorily covered under EPF and EPS. Those earning above this limit can choose to opt in voluntarily, but employers are not legally bound to register them.
If approved, this revision will extend social security coverage to nearly 1 crore (10 million) additional workers, particularly those in low- and mid-skilled urban sectors, whose salaries have risen above ₹15,000 amid inflation and rising living costs.
Understanding the EPF and EPS Contribution
Under the EPF framework:
Employees contribute 12% of their basic salary every month.
Employers also contribute 12%, split into:
3.67% towards EPF
8.33% towards the Employees’ Pension Scheme (EPS)
This combined contribution ensures a long-term savings corpus for employees while securing their post-retirement income.
Why This Move Matters
Labour experts and unions have been urging the government to update the wage ceiling, last revised in 2014 when it was increased from ₹6,500 to ₹15,000. Over the past decade, India’s urban wages and cost of living have surged, leaving many workers earning slightly above Rs 15,000 without the benefits of EPFO’s pension and insurance coverage.
“An upward revision is long overdue. A ₹25,000 ceiling reflects today’s economic reality and ensures a wider section of India’s workforce is protected under the formal social security net,” said a senior trade union leader.
What’s Next
The Ministry of Labour and Employment is currently reviewing the proposal’s fiscal impact. Once the CBT approves it, the change will require a notification from the central government before implementation.
If cleared, this would mark one of the biggest social security expansions in a decade, ensuring financial protection for millions more in India’s growing workforce.
