Overview
- The Union Cabinet approved the increase from Rs 15,000 to Rs 25,000, a decision announced on Wednesday and reported to take effect from Vishwakarma Day, Thursday September 17, 2026.
- The change is expected to bring about 51 lakh additional employees into mandatory EPF coverage, giving workers in the Rs 15,000–25,000 band access to provident fund savings, pension (EPS) and insurance (EDLI) subject to scheme rules.
- The government estimates an annual fiscal outlay of around Rs 11,339 crore and a five‑year cost of about Rs 56,696 crore, while employers face an average extra cost of roughly Rs 600 per affected worker per month.
- The Ministry of Labour and Employment and the EPFO must now issue formal notifications and complete statutory and administrative steps before contribution rules, effective date confirmation and pro‑rata pension treatments are operational.
- Practical impacts will fall first on payroll teams, manufacturing firms and MSMEs that must adjust contributions and take‑home pay calculations, while the change builds on EPFO’s existing coverage of about 7.98 crore contributors and 82 lakh pensioners.