The Union Cabinet has approved a significant change in the Employees’ Provident Fund (EPF) framework, raising the wage ceiling for mandatory EPFO coverage from ₹15,000 to ₹25,000 per month. The revision comes after 12 years, with the previous increase having been made in September 2014.
Under the new provision, employees earning wages up to ₹25,000 a month will fall within the mandatory EPFO coverage framework, subject to the applicable rules. The government expects the change to bring more than 51 lakh additional employees into mandatory EPFO coverage.
The EPFO administers three major social-security schemes covering provident fund savings, pension and insurance. The expansion will therefore extend access to the Employees’ Provident Fund Scheme, Employees’ Pension Scheme and Employees’ Deposit Linked Insurance Scheme for a larger number of workers.
The employee and employer contribution rate remains 12 per cent of applicable wages under the EPF framework. With the higher wage ceiling, the statutory contribution framework will accommodate workers earning between ₹15,000 and ₹25,000 who were previously outside mandatory coverage because of the earlier ceiling.
According to government estimates, the decision will increase annual government expenditure by approximately ₹1,089 crore, taking the total annual budgetary support to around ₹11,339 crore. The estimated expenditure over five years is approximately ₹56,696 crore.
The government said the revision takes into account rising wages, higher incomes and the expansion of formal employment since the previous wage-ceiling revision in 2014. The measure is intended to widen statutory social-security coverage among formal-sector workers.
The latest decision follows several months of discussion over increasing the EPFO wage ceiling. Earlier in 2026, the proposal had reportedly been put on hold amid concerns about the additional compliance burden on employers. The Cabinet has now formally approved the increase, with the Labour Ministry and EPFO expected to undertake the necessary administrative and statutory steps for implementation.
