Cabinet approves enhancement of EPFO wage ceiling from Rs.15,000 to Rs.25,000 per month

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The Union Cabinet on 16 September 2026 approved the proposal of the Ministry of Labour and Employment to increase the wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) from ₹15,000 to ₹25,000 per month. The move is expected to bring more than 51 lakh additional employees under mandatory EPFO coverage and expand social-security protection for workers.

About EPFO Wage Ceiling

The EPFO wage ceiling had remained unchanged for a decade before it was increased to ₹15,000 in September 2014. Under the existing framework, employees joining employment with wages above ₹15,000 per month are not automatically covered under mandatory EPF provisions. Raising the ceiling to ₹25,000 will bring employees earning between ₹15,000 and ₹25,000 per month within the statutory social-security framework.

The EPFO administers three major social-security schemes: the Employees’ Provident Fund (EPF), the Employees’ Pension Scheme (EPS) and the Employees’ Deposit Linked Insurance Scheme (EDLI). It currently has around 7.98 crore contributing members across approximately 7.68 lakh contributing establishments, while the EPS provides pension benefits to around 82 lakh pensioners.

Under the EPF system, both the employee and employer contribute 12% of basic wages, dearness allowance and retaining allowance, where applicable. The employee’s entire contribution goes towards EPF, while the employer’s 12% contribution is divided into 3.67% for EPF and 8.33% for EPS. The government contributes 1.16% towards an employee’s pension up to the applicable wage ceiling.

The approved change will also raise the monthly EPS pension contribution ceiling from ₹1,250 to ₹2,080, while employees do not make a separate contribution to the pension scheme.

Source: PIB

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