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EPFO Wage Ceiling Rises to Rs 25,000, Affecting Salaries
The government has raised the salary limit used for mandatory EPF coverage.
The limit moved from Rs 15,000 to Rs 25,000 per month.
This means more workers may now become part of EPFO schemes.
About 51 lakh additional employees could be covered, according to the government.
It does not mean every employee will automatically pay Rs 3,000 into EPF.
If the full new limit is used with a 12% contribution rate, an employee’s contribution could rise by Rs 1,200 per month.
That could reduce take-home pay by Rs 1,200, while increasing retirement savings by the same amount.
Employers may also have to contribute more for affected employees.
The exact effect depends on the employee’s salary structure and existing PF arrangement.
Mandatory EPFO coverage wage ceiling increased from Rs 15,000 to Rs 25,000 monthly.
The change took effect on 17 September 2026 after Cabinet approval and a government notification.
Employees earning between Rs 15,000 and Rs 25,000 may now come under mandatory EPFO coverage, subject to applicable conditions.
Using a 12% contribution rate, the maximum employee contribution could rise from Rs 1,800 to Rs 3,000 monthly.
The government estimates that about 51 lakh additional employees could enter the statutory social-security framework.
- Who
- The Government of India, EPFO, employers and employees affected by the revised wage ceiling.
- What
- The mandatory EPFO coverage wage ceiling was raised from Rs 15,000 to Rs 25,000 per month.
- Where
- Under India’s Employees’ Provident Fund Organisation framework.
- When
- The change took effect on 17 September 2026, after Cabinet approval on 16 September 2026.
- Why
- The government said the change is intended to expand social-security coverage through EPF, EPS and EDLI.
Expanded Social Security
Higher Contributions and Costs
Effect on employees
Expanded Social Security
The higher ceiling can bring employees earning between Rs 15,000 and Rs 25,000 into mandatory EPFO coverage and increase their retirement savings.
Higher Contributions and Costs
Employees whose applicable contribution base rises may see take-home pay fall, potentially by Rs 1,200 monthly in the illustrative calculation.
Effect on employers
Expanded Social Security
Employers’ contributions would also increase for affected employees, strengthening the statutory social-security contribution.
Higher Contributions and Costs
The employer’s contribution could rise from Rs 1,800 to Rs 3,000 per month per affected employee, increasing statutory payroll costs.
Extent of the change
Expanded Social Security
The revised ceiling is intended to expand coverage and could include about 51 lakh additional employees.
Higher Contributions and Costs
The change does not automatically mean every employee will contribute Rs 3,000; the actual impact depends on salary structure, wage components and existing PF arrangements.
Key facts
- Old wage ceiling
- Rs 15,000 per month
- New wage ceiling
- Rs 25,000 per month
- Effective date
- 17 September 2026
- Potential additional coverage
- Around 51 lakh employees
- Illustrative employee contribution
- 12% of Rs 25,000 equals Rs 3,000 per month, compared with Rs 1,800 under the previous ceiling
- Possible monthly increase
- Rs 1,200 for employees and employers when the full revised contribution base applies
- Covered schemes
- Employees’ Provident Fund, Employees’ Pension Scheme and Employees’ Deposit Linked Insurance Scheme
Sources
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