Cabinet Lifts EPF And EPS Wage Limit By ₹10,000, New Ceiling Set At ₹25,000

New Delhi: The Union Cabinet has approved an increase in the Employees’ Provident Fund Organisation wage ceiling from ₹15,000 to ₹25,000 per month, extending mandatory social security coverage to over 51 lakh additional workers.

The decision, cleared at a meeting chaired by Prime Minister Narendra Modi, will bring employees earning between ₹15,000 and ₹25,000 into the EPFO framework.

Wider EPF, Pension And Insurance Coverage

Currently, employees joining a new job with monthly wages above ₹15,000 are not automatically covered under the Employees’ Provident Fund framework.

The higher EPFO wage ceiling will expand access to retirement savings under EPF, pension protection through the Employees’ Pension Scheme and insurance benefits under the Employees’ Deposit Linked Insurance Scheme.

The government said the revised limit better reflects prevailing salaries, wage growth and the expansion of formal employment.

Government Outgo To Increase

The Expenditure Finance Committee recommended the proposal on June 16.

The annual government expenditure is estimated at ₹11,339 crore, compared with existing budgetary support of approximately ₹10,250 crore. The total projected expenditure over five years is around ₹56,696 crore.

The EPFO wage ceiling remained unchanged between 2004 and 2014. It was increased to ₹15,000 in September 2014 and has now been raised by another ₹10,000.

Push For Formal Employment

The government expects wider EPFO coverage to encourage job formalisation, workforce stability, employee retention and long-term retirement security.

Employers may also benefit from improved morale and a more secure workforce, while employees will gain portable statutory social security protection linked to formal jobs.

EPFO currently administers EPF, EPS and EDLI for about 7.98 crore contributing members across nearly 7.68 lakh establishments. The pension scheme supports around 82 lakh pensioners.

The increase represents a major expansion of India’s social security system, ensuring provident fund, pension and insurance coverage keeps pace with rising wages and formal job creation.