Govt raises EPFO wage ceiling to ₹25,000; 5.1 mn more workers to be covered
New Delhi, Sep 16, 2026
The proposal is expected to bring more than 5.1 million additional employees under mandatory EPFO coverage
The government on Wednesday approved a proposal by the Ministry of Labour and Employment to enhance the wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) from ₹15,000 to ₹25,000 per month.
The approval, given during a Union Cabinet meeting chaired by Prime Minister Narendra Modi today, 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), in accordance with the applicable scheme provisions.
The proposal is expected to bring more than 5.1 million additional employees under mandatory EPFO coverage, a Cabinet press note read.
Currently, employees joining a job at a wage above ₹15,000 per month are not automatically covered under the EPF framework. Raising the ceiling to ₹25,000 will bring a larger segment of employees earning between ₹15,000 and ₹25,000 a month within the statutory social security framework, according to a Cabinet press note.
It will also enable the statutory contribution and pensionable-wage framework to better reflect prevailing wage levels.
“By bringing a larger number of employees automatically within the statutory social security framework, the decision strengthens the principle that formal employment should be accompanied by portable and assured social security protection. For employers as well, wider social security coverage can support employee retention, workforce stability, morale and the development of a more secure and future-ready workforce,” the press note read.
The EPFO wage ceiling was last revised in September 2014, when it was raised to ₹15,000. The government said the latest increase reflects sustained wage growth, rising incomes and the continued expansion of formal employment since then.
The proposal was recommended by the Expenditure Finance Committee at its meeting on June 16, 2026. The annual government expenditure on the measure is estimated at around ₹11,339 crore, compared with existing annual budgetary support of about ₹10,250 crore. The estimated expenditure over five years is approximately ₹56,696 crore.
The government said it will, along with EPFO, undertake the necessary statutory and administrative steps to implement the decision.
[The Business Standard]
