EPFO wage ceiling raised to ₹25,000 from ₹15,000: Ashwini Vaishnaw

The Union cabinet has approved increasing the wage ceiling for Employees' Provident Fund coverage from ₹15,000 to ₹25,000, Information Minister Ashwini Vaishnaw stated.

The Union cabinet on Wednesday approved raising the wage ceiling for Employees' Provident Fund (EPF) coverage to ₹25,000 from ₹15,000, Information Minister Ashwini Vaishnaw announced. This marks the first revision to the EPF wage limit in 12 years.

Today's decision is expected to bring more than 51 lakh additional employees under mandatory EPFO coverage, widening social security protection for workers.

At present, a new employee earning wages above ₹15,000 per month is not automatically covered under the EPF framework and may remain outside the mandatory provident fund, pension, and associated insurance protection.

With the ceiling now raised to ₹25,000, employees falling in the ₹15,000- ₹25,000 monthly wage band will come within the statutory social security framework.

The move will expand access to provident fund savings, pension protection under the Employees’ Pension Scheme (EPS) and insurance protection under the Employees’ Deposit Linked Insurance Scheme (EDLI), subject to applicable scheme provisions.

“The present decision carries forward this approach by further raising the ceiling to ₹25,000 to reflect sustained wage growth, rising incomes and continued expansion of formal employment over the intervening years,” an official release stated.

The EPFO wage ceiling remained unchanged from 2004 to 2014 and was enhanced to ₹15,000 in September 2014.

The annual government outgoings are estimated at about ₹11,339 crore, against the existing annual budgetary support of about ₹10,250 crore. The estimated expenditure over five years is approximately ₹56,696 crore.

The government expects the measure to support further formalisation of employment, improve long-term retirement security and widen access to portable statutory social security benefits.

The EPFO currently administers the Employees’ Provident Fund, Employees’ Pension Scheme and Employees’ Deposit Linked Insurance Scheme.

According to the latest EPFO data cited by the government, the organisation has around 7.98 crore contributing members across about 7.68 lakh contributing establishments, while the EPS provides pension benefits to around 82 lakh pensioners.

The Ministry of Labour and Employment and EPFO will now undertake the necessary statutory and administrative steps to implement the Cabinet decision.

(With inputs from ANI and PTI)

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