Big Relief for salaried workers; EPFO wage limit increased to ₹25,000

Punjab Newsline | New Delhi

In a major boost for salaried employees, the Union Cabinet on Wednesday approved an increase in the Employees’ Provident Fund Organisation (EPFO) wage ceiling from ₹15,000 to ₹25,000 per month. The decision is expected to bring more than 51 lakh additional workers under mandatory EPFO coverage, significantly expanding the country’s social security net.

The wage ceiling determines the maximum monthly salary considered for mandatory provident fund contributions. Under the existing framework, EPF contributions are generally calculated on a statutory wage ceiling of ₹15,000 per month. With the revised limit of ₹25,000, a larger number of employees will now become eligible for EPF and pension benefits.

Announcing the Cabinet decision, Union Information and Broadcasting Minister Ashwini Vaishnaw said the revision comes after 12 years. The EPFO wage ceiling was last increased in September 2014, when it was raised from ₹6,500 to ₹15,000 per month. Prior to that, the limit had remained unchanged for a decade.

According to the government, the move reflects rising wage levels, growing incomes and the expansion of formal employment across the country. The revised ceiling is aimed at strengthening financial security for workers by extending access to provident fund savings and pension benefits.

Officials said that more than 51 lakh additional employees are expected to come under mandatory EPFO coverage as a result of the change. Earlier, employees earning above ₹15,000 per month were outside the mandatory coverage bracket. The new threshold will now include workers earning up to ₹25,000 per month.

For instance, if an employee’s basic salary and dearness allowance total ₹20,000 per month, EPF contributions were previously calculated on the wage ceiling of ₹15,000, resulting in an employee contribution of ₹1,800 per month.

With the higher ceiling, eligible employees are expected to benefit from increased provident fund accumulation and enhanced pension coverage.

The government said the reform is a significant step toward building a stronger social security framework and ensuring that a larger section of India’s workforce is protected through formal retirement and pension schemes.