New Delhi: Union Cabinet approved raising the EPFO wage ceiling for mandatory coverage from Rs.15,000 to Rs.25,000 a month. The move was expected to bring more than 51 lakh additional employees under mandatory EPFO coverage.
The Cabinet approved the proposal from the Ministry of Labour & Employment at a meeting chaired by Prime Minister Narendra Modi. The decision will widen statutory social security coverage for workers.
The EPFO wage ceiling had remained unchanged from 2004 to 2014. The government then raised it to Rs.15,000 in September 2014. Now, it has approved another increase after more than a decade.
Under the existing rule, employees joining jobs with wages above Rs.15,000 are not automatically covered by the EPF framework. Therefore, some employees can remain outside mandatory provident fund, pension and insurance protection.
The revised EPFO wage ceiling will cover employees earning between Rs.15,000 and Rs.25,000. This change will expand access to statutory social security for a wider section of formal workers.
Employees covered under the revised limit will gain access to provident fund savings. They will also receive pension protection under the Employees’ Pension Scheme, subject to its provisions.
In addition, eligible workers will receive insurance protection under the Employees’ Deposit Linked Insurance Scheme. The change will also help the contribution and pensionable-wage framework reflect current wage levels.
The government said wages and incomes had risen since the last revision. Formal employment had also continued to expand during the period.
Moreover, minimum wages in several States and occupations had moved closer to the existing Rs.15,000 limit. Therefore, the new EPFO wage ceiling will bring the framework closer to prevailing wage levels.
EPFO wage ceiling supports wider social security coverage
The government expects the EPFO wage ceiling increase to support employment formalisation and long-term retirement security. It will automatically bring more eligible employees into the statutory social security system.
The measure could also support worker retention and workforce stability. For employers, wider social security coverage can help strengthen employee retention and workforce continuity.
The proposal followed detailed inter-ministerial consultations. The Expenditure Finance Committee recommended the proposal at its meeting on 16 June 2026.
The government estimated annual expenditure at about Rs.11,339 crore. The existing annual budgetary support stood at about Rs.10,250 crore.
Over five years, the estimated expenditure will reach approximately Rs.56,696 crore. The additional spending will support the expanded social security coverage.
EPFO currently administers three major schemes. These include the Employees’ Provident Fund, Employees’ Pension Scheme and Employees’ Deposit Linked Insurance Scheme.
The latest EPFO data show around 7.98 crore contributing members. These members work across about 7.68 lakh contributing establishments.
Meanwhile, the Employees’ Pension Scheme provides pension benefits to around 82 lakh pensioners. The EDLI scheme provides insurance protection linked to EPF membership.
The revised EPFO wage ceiling will therefore extend statutory protection to more workers. It will also expand access to retirement savings, pension benefits and insurance cover.
The government linked the decision to rising wages, improving incomes and expanding formal employment. It said social security coverage should keep pace with these changes.
The Ministry of Labour & Employment and EPFO will now take the required statutory and administrative steps. Those steps will enable implementation of the Cabinet-approved change.
The decision raises the mandatory coverage threshold from Rs.15,000 to Rs.25,000 a month. It is expected to bring more than 51 lakh additional employees into the EPFO system.
The government also placed the decision within its wider social security vision. It said the measure would help build an inclusive and future-ready system as India moves towards Viksit Bharat@2047.
