Imagine this — your monthly salary finally crosses ₹15,000, and suddenly, you’re no longer eligible for EPF or pension benefits. Sounds unfair, right? That’s exactly what the Employees’ Provident Fund Organization (EPFO) is planning to fix.
The government is preparing a major update that could bring over 1 crore additional workers under India’s social security umbrella. The EPFO is considering raising the salary threshold from ₹15,000 to ₹25,000 per month, allowing millions more to benefit from the Employees’ Provident Fund (EPF) and the Employees’ Pension Scheme (EPS).
What This ₹10,000 Increase Really Means
Right now, anyone earning above ₹15,000 per month can opt out of EPF and EPS — meaning they miss out on long-term financial safety. But under the proposed rule, employees earning up to ₹25,000 will automatically qualify for these benefits.
For reference, both employee and employer contribute 12% of the salary each month to EPF. Out of the employer’s share, 8.33% goes to EPS (pension) and 3.67% to EPF (savings).
That may sound like numbers on paper, but here’s the magic:
- A higher salary ceiling means bigger contributions.
- Bigger contributions mean higher retirement savings and pension.
- And that means more financial peace of mind when you stop working.
With the EPFO already managing ₹26 lakh crore in funds and 7.6 crore active members, this expansion could make the system even stronger — benefiting both workers and the economy.
Why This Step Is So Important
Experts say the current ₹15,000 limit no longer reflects real wages, especially in metros where living costs have soared. Many low- and mid-skilled workers now earn above that but remain outside EPFO coverage.
By raising the ceiling to ₹25,000, the government aims to:
- Expand social security to more workers
- Improve payroll transparency in companies
- Encourage long-term savings and financial discipline
Sure, it may slightly increase statutory costs for employers. But in the bigger picture, it’s a win-win — ensuring more Indians have a secure retirement and reliable pension income.
What the Government Hopes to Achieve
This move isn’t just administrative. It’s part of a larger social security vision — to pull more workers from the unorganized sector into structured safety nets.
With inflation rising and the cost of living pushing families to the edge, a stronger EPF system gives millions the assurance that their future is protected. In the long run, it’ll also boost purchasing power and encourage national savings, driving broader economic stability.
The proposal is likely to be discussed at the next EPFO Central Board of Trustees meeting in December or January. If approved, it could mark one of the most impactful labour reforms in recent years.
Frequently Asked Questions
1. What is the new proposed EPFO wage ceiling?
The EPFO plans to raise the salary threshold for mandatory EPF and EPS coverage from ₹15,000 to ₹25,000 per month, potentially benefiting around one crore workers.
2. How does this change help employees?
It ensures more workers are included in pension and provident fund schemes, increasing their retirement savings and long-term financial security.
3. When will this proposal be implemented?
The EPFO Board is expected to discuss it in December or January. If approved, implementation could begin soon after government notification.