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4w ago

Government Raises EPFO Wage Ceiling to ₹25,000

The move expands mandatory provident fund, pension and insurance to mid‑income workers, with officials citing higher payroll costs and promising EPFO guidance.

The government estimates that more than 5.1 million employees will come under mandatory EPFO coverage.
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EPFO wage ceiling rises to ₹25,000: What it means for salaries of ₹10,000, ₹20,000 and above ₹25,000

Overview

  • The Ministry of Labour and Employment issued a Gazette notification effective September 17, 2026, formally raising the statutory wage ceiling for mandatory EPFO coverage from ₹15,000 to ₹25,000.
  • The government estimates the change will bring about 5.1 million additional employees into mandatory EPFO membership, extending PF, Employees’ Pension Scheme and EDLI insurance to new joiners in the ₹15,000–₹25,000 band.
  • Raising the ceiling increases the maximum 12% employee contribution from ₹1,800 to ₹3,000 per month and raises corresponding employer liabilities for workers whose contributions were capped at the statutory limit.
  • Officials put the additional annual fiscal cost at roughly ₹11,339 crore and the five‑year cost at about ₹56,696 crore, and analysts say labour‑intensive sectors with many mid‑level roles will see the biggest payroll impact.
  • EPFO and the labour ministry are expected to publish operational guidance next to clarify contribution calculations, transitional rules and employer compliance steps after the Cabinet approval and the Supreme Court’s earlier direction to review the ceiling.