Provident Fund Wage Ceiling Hiked To Rs 25,000 From Rs 15,000 Per Month, tell me about this news in (https://www.ndtv.com/india-news/employees-provident-fund-epfo-wage-ceiling-hiked-to-rs-25-000-from-rs-15-000-per-month-12054127)
16-09-2026
The Union Cabinet approved raising the monthly wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) from ₹15,000 to ₹25,000.Key Details of the Decision
- First Revision in 12 Years: The mandatory wage threshold was last revised in September 2014, when it was increased from ₹6,500 to ₹15,000 per month.
- Expanded Social Security Net: By raising the ceiling to ₹25,000, over 50 lakh (5 million) additional formal sector workers are expected to come under mandatory social security coverage, including both the Employees’ Provident Fund (EPF) and the Employees’ Pension Scheme (EPS).
- Mandatory Coverage Threshold: Establishments with 20 or more employees are legally required to enroll all staff whose basic wage plus dearness allowance falls within this statutory limit.
- Higher Retirement Savings: The statutory monthly contribution is 12% of basic wages. At ₹15,000, the maximum mandatory employee deduction was ₹1,800 per month. With the ceiling raised to ₹25,000, the mandatory contribution can go up to ₹3,000 per month.
- Take-Home Pay vs. Long-Term Corpus: For workers earning between ₹15,000 and ₹25,000 who were previously contributing only up to the ₹15,000 cap (or were not enrolled), their monthly take-home pay will see a moderate reduction due to higher deductions, while their accumulated retirement and pension corpus will grow substantially over time.
- Higher Payroll Costs: Employers are required to match the employee’s 12% contribution (split into EPF and EPS). This revision increases compliance and wage-bill expenses for businesses employing staff in the ₹15,000 to ₹25,000 salary bracket.