New Delhi: In a move aimed at strengthening retirement security for workers, the Centre Wednesday gave the green signal to a labour ministry proposal to increase the wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) from Rs 15,000 to Rs 25,000 per month.
Currently, employees who join a job with a monthly wage above Rs 15,000 are not automatically covered by the EPF and may not get mandatory provident fund, pension and insurance benefits.
The decision taken at the Cabinet meeting chaired by Prime Minister Narendra Modi is expected to bring more than 51 lakh additional employees within the ambit of mandatory EPFO coverage, significantly widening social security protection for workers.
EPFO operates one of the world’s largest social security systems, administering the Employees’ Provident Fund, Employees’ Pension Scheme and Employees’ Deposit Linked Insurance (EDLI) Scheme.
The latest EPFO data show around 7.98 crore contributing members across about 7.68 lakh contributing establishments, while the EPS provides pension benefits to around 82 lakh pensioners. EDLI provides insurance protection linked to EPF membership.
श्रमेव जयते!
माननीय प्रधानमंत्री श्री नरेंद्र मोदी जी का हृदय से आभार। आज उनके नेतृत्व में केंद्रीय मंत्रिमंडल ने EPFO की wage ceiling को ₹15,000 से बढ़ाकर ₹25,000 प्रतिमाह करने का महत्वपूर्ण निर्णय लिया है।
यह निर्णय देश के श्रमिकों को सामाजिक सुरक्षा का व्यापक कवच प्रदान… pic.twitter.com/GzacWuKXco
— Dr Mansukh Mandaviya (@mansukhmandviya) September 16, 2026
“This decision will not only provide a broader shield of social security to the country’s workers but will also accelerate the formalisation of employment,” Union Labour and Employment Minister Mansukh Mandaviya posted, welcoming the Cabinet decision.
Also Read: EPFO to transfer Rs 1,000 or less lying in over 7 lakh inoperative accounts directly to members
Previous revision in Sept 2014
The EPFO wage ceiling was last revised in September 2014, when it was increased to Rs.15,000. Since then, incomes have gone up and so has the expansion of formal employment. The enhancement to Rs 25,000 updates the EPFO framework in line with rising wage levels and extends the benefits of formal social security to a wider segment of the workforce.
“The present decision carries forward this approach by further raising the ceiling to Rs 25,000 to reflect the sustained wage growth, rising incomes and a continued expansion of formal employment over the intervening years,” said a press statement issued by the labour and employment ministry.
Presently, a person who joins a workplace at a salary of over Rs 15,000 per month is not automatically covered under the EPF framework and may remain outside mandatory provident fund, pension and associated insurance protection.
“Raising the ceiling to Rs.25,000 will bring a substantial segment of employees in the Rs.15,000– Rs.25,000 wage band within the statutory social security framework,” the press statement said.
The enhancement, therefore, updates the EPFO framework in line with rising wage levels and extends the benefits of formal social security to a wider segment of the workforce.
The approval will also expand access to provident fund savings, pension protection under the Employees’ Pension Scheme, and insurance protection under the Employees’ Deposit Linked Insurance Scheme, in accordance with the applicable scheme provisions. It will also enable the statutory contribution and pensionable-wage framework to better reflect prevailing wage levels.
“The measure is expected to give a further impetus to formalisation of employment, worker retention and long-term retirement security,” the government statement said.
“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 EPFO proposal was recommended by the Expenditure Finance Committee in its meeting 16 June. It will cost the government an estimated Rs 11,339 crore, against the existing annual budgetary support of about Rs 10,250 crore. The estimated expenditure over five years is approximately Rs 56,696 crore.
(Edited by Tony Rai)
Also Read: 20L formal jobs created in July, biggest monthly addition to EPFO. 3 lakh women entered job market