Cabinet Raised EPFO Wage Ceiling from ₹15,000 to ₹25,000

The Union Cabinet has decided to enhance mandatory social security coverage by increasing the wage ceiling limit of the Employees’ Provident Fund Organisation (EPFO) from ₹15,000 to ₹25,000 per month. The initiative is likely to cover an additional 51 lakh workers in the ambit of mandatory EPFO coverage. This measure will not only make social security coverage accessible for more people but will also formalise their employment to a greater extent. In addition, the revised wage ceiling considers the rise in wage rate, income level, and formal employment pattern since the last revision in September 2014.

Increase in Wage Ceiling of EPFO to ₹25,000

The Union Cabinet headed by Prime Minister Narendra Modi has approved the recommendation of the Ministry of Labour & Employment on increasing the ceiling limit of wages for mandatory social security coverage under the EPFO from ₹15,000 to ₹25,000 per month.

Workers whose monthly wages range between ₹15,000 to ₹25,000 will constitute the bulk of the additional number of workers that have been included in mandatory social security coverage.

The previous wage ceiling of ₹15,000 was set back in September 2014.

Over 51 Lakh Workers Will be Benefited

The hike in ceiling is expected to help over 51 lakh more workers join the mandatory EPFO scheme.

Currently, any new worker who joins a job and earns a salary above ₹15,000 per month is not automatically covered by the mandatory EPF scheme. By increasing the ceiling to ₹25,000, a number of workers who earn between ₹15,000 and ₹25,000 per month can be covered by the scheme.

Some Important Figures

Financial implications of the decision

The proposal has undergone inter-ministerial consultations and has been approved by the Expenditure Finance Committee (EFC) during their meeting dated June 16, 2026.

Estimated cost for each year would be around ₹11,339 crores, whereas the current cost of annual budgetary provision would be around ₹10,250 crores.

Estimated cost over a period of five years would be around ₹56,696 crores.

EPFO: Key points

EPFO manages three important social security schemes; namely, EPF, EPS and EDLI.

As per the latest information quoted in the press release,

• Approximately 7.98 crore contributing members are covered under the EPFO scheme.
• These contributing members belong to approximately 7.68 lakh contributing establishments.
• Employees’ Pension Scheme would provide pension to around 82 lakh pensioners.
• EDLI would provide insurance cover to EPF members.

Reasons for the Increase in the EPFO Wage Ceiling

The wage ceiling was not revised since September 2014. There have been increasing wages, incomes, and formal employment in India during this period of time.

Moreover, minimum wages have been increasing towards the current ₹15,000 level in several states and jobs. The revision of the ceiling up to ₹25,000 is aimed at making the mandatory social security coverage coincide with actual wage rates.

These are supposed to help increase formalization of employment, job retention, and retirement security.

What will Happen Next?

Ministry of Labour & Employment and EPFO are supposed to take necessary measures to realize the Cabinet decision.

It is expected to ensure that the social security coverage increases along with formal employment and more workers gain retirement, pension, and insurance benefits.