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Government Raises EPF Wage Ceiling to Rs 25,000

The change broadens social security for workers by raising the wage base used to calculate EPF, pension and insurance contributions.

The revised coverage will provide access, subject to the applicable scheme provisions, to the three major schemes administered by EPFO — EPF, EPS and EDLI. (HT Archive)
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Overview

  • The Union Cabinet approved increasing the statutory EPF wage ceiling and the ministry issued a gazette notification so the change took effect from September 17, 2026.
  • The government estimates the revision will bring about 51 lakh more employees under mandatory coverage of the Employees’ Provident Fund, Employees’ Pension Scheme and the deposit‑linked insurance scheme.
  • Statutory contributions remain 12% for employees and employers, so applying that rate to the new Rs 25,000 ceiling can lift monthly contributions from Rs 1,800 to Rs 3,000 and add up to Rs 1,200 in deductions for affected workers.
  • The employer’s 12% share is split with 8.33% going to the pension scheme so the higher ceiling raises the maximum monthly EPS allocation roughly from Rs 1,250 to Rs 2,083 and may increase future pension entitlements for eligible members.
  • Actual effects will vary because the Code on Social Security, 2020 defines which pay elements count as ‘wages’; employees should check payslips for the wage used to calculate PF and employers must apply the new basis while bearing the statutory employer cost.