Union Labour and Employment Minister Mansukh Mandaviya
According to the latest EPFO data cited by the government, the organisation has around 7.98 crore contributing members across about 7.68 lakh contributing establishments, while the EPS provides pension benefits to around 82 lakh pensioners.
New Delhi: Union Labour and Employment Minister Mansukh Mandaviya on Wednesday said the increase in the EPFO wage ceiling from Rs 15,000 to Rs 25,000 per month, to be implemnted from Sept17. could benefit between 50 lakh and one crore new beneficiaries by bringing more workers under mandatory social security coverage.
“We estimate that between 50 lakh and 1 crore new beneficiaries will gain from this,” Mandaviya said, reacting to the Cabinet decision.
Addressing the media, Mandaviya said that the enhancement of the statutory wage ceiling for mandatory EPFO coverage from ₹15,000 to ₹25,000 per month marks an important step towards strengthening social security for workers. The revised ceiling, which will come into effect from 17 September 2026 on the occasion of Vishwakarma Jayanti and Sewa Divas, will enable a larger number of employees to access provident fund savings, pension and insurance protection under the applicable EPFO schemes.
Mandaviya highlighted that the decision will further advance the Government’s commitment to providing social security to all workers under the Labour Codes and will also give impetus to the formalisation of employment.
He highlighted that the wage ceiling had remained unchanged since September 2014 despite considerable increases in wages, minimum wages and living costs. At present, employees joining an establishment at wages above Rs. 15,000 per month are not automatically covered under the mandatory EPF framework, subject to the applicable statutory provisions. With the revised ceiling, employees drawing wages between Rs. 15,000 and Rs. 25,000 per month will become eligible for mandatory coverage, expanding the reach of formal social security, he said.
The enhanced coverage will provide access, in accordance with the applicable statutory and scheme provisions, to the three major components administered by EPFO -Employees’ Provident Fund (EPF), Employees’ Pension Scheme (EPS) and Employees’ Deposit Linked Insurance Scheme (EDLI). This will strengthen retirement savings, pension protection and insurance-linked social security for a larger section of workers.
The government said the latest revision reflects sustained wage growth, rising incomes and the expansion of formal employment over the intervening period.
The annual government outgo following the enhancement is estimated at about Rs 11,339 crore, compared with the existing annual budgetary support of around Rs 10,250 crore. The estimated expenditure over five years is about Rs 56,696 crore.
The government expects the measure to support further formalisation of employment, improve long-term retirement security and widen access to portable statutory social security benefits.
According to the latest EPFO data cited by the government, the organisation has 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 and Employment and EPFO will now undertake the necessary statutory and administrative steps to implement the Cabinet decision.
The decision is also expected to strengthen worker retention and workforce stability, while providing employees greater financial security.
For employers, a more secure workforce can contribute to improved employee retention, workforce stability and morale, supporting a more future-ready workforce.
The EPFO wage ceiling was last revised in September 2014, when it was increased to Rs 15,000.
Commenting on the decision, Puneet Gupta, Partner, People Advisory Services-Tax at EY India, said the increase would expand social security benefits but would also have cost implications for employers and employees.
“Mandatory EPF contributions will correspondingly apply on wages up to Rs 25,000 per month instead of Rs 15,000. This is expected to enhance retirement savings and social security coverage for employees,” Gupta said.
However, he said employers could face higher PF, pension and EDLI contributions, particularly for employees earning between Rs 15,000 and Rs 25,000 where contributions are currently restricted to the statutory ceiling.
“Employees in the affected salary bracket are also likely to witness a reduction in take-home pay due to the higher employee PF contribution,” Gupta said.
He added that employers should await the formal notification and detailed implementation provisions before assessing the full impact of the revised wage ceiling.
ANI