New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a 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.
The decision is expected to bring more than 51 lakh additional employees under mandatory EPFO coverage, widening access to statutory social security protection.
At present, employees joining a job at a wage above Rs.15,000 per month are not automatically covered under the Employees’ Provident Fund (EPF) framework. With the revised ceiling, employees earning between Rs.15,000 and Rs.25,000 per month will be brought within the statutory social security framework.
The enhanced coverage will provide access to provident fund savings, pension protection under the Employees’ Pension Scheme and insurance protection under the Employees’ Deposit Linked Insurance Scheme, subject to the applicable scheme provisions.
The EPFO wage ceiling had remained unchanged during the decade from 2004 to 2014 before being increased to Rs.15,000 in September 2014. The latest decision further raises the ceiling to Rs.25,000 to reflect sustained wage growth, rising incomes and the expansion of formal employment.
According to the government, the move is also expected to support the formalisation of employment, worker retention and long-term retirement security. Wider social security coverage could also contribute to workforce stability and employee retention for employers.
The proposal underwent detailed inter-ministerial consultations and was recommended by the Expenditure Finance Committee at its meeting on June 16, 2026.
The annual Government outgo from the measure is estimated at Rs.11,339 crore, compared with the existing annual budgetary support of about Rs.10,250 crore. The estimated expenditure over five years is approximately Rs.56,696 crore.
EPFO currently administers the EPF, Employees’ Pension Scheme and Employees’ Deposit Linked Insurance 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.
The Ministry of Labour & Employment and EPFO will undertake the necessary statutory and administrative steps for implementation of the decision.
