EPFO wage ceiling rises to Rs 25,000: Will your take-home salary decrease?

The change will extend EPF, pension and insurance benefits to more than 5 million workers, with contribution rules yet to be detailed.

A rise in the EPFO wage ceiling could change how millions of salaried workers split their monthly pay between cash in hand and retirement savings. The government has approved raising the wage ceiling for mandatory EPFO coverage from Rs 15,000 to Rs 25,000 a month, bringing more workers into the formal social-security system. But for employees, the immediate question is will more money go into PF, and will that mean less salary in hand each month?

EPFO wage ceiling: What changes?

The Rs 15,000 monthly wage ceiling has been in place since September 2014. Under the new decision, employees earning between Rs 15,000 and Rs 25,000 a month could come under mandatory EPFO coverage when the revised framework is implemented.

The government said the move will extend access to three key social-security benefits:

Employees’ Provident Fund (EPF)

Employees’ Pension Scheme (EPS)