Good news for employees: Cabinet raises EPFO wage ceiling to ₹25,000
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The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a proposal to raise the wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) to ₹25,000 per month from ₹15,000. The move is expected to bring more than 51 lakh additional employees under the statutory social security framework.
Union Minister Ashwini Vaishnaw on Wednesday said, "Nearly 51 lakh employees will benefit from this. Government expenditure would be ₹11,339 crore." "This was a demand for long and has now been approved by the PM. This wider security social net will help employees and employers both. Unskilled minimum wage has increased beyond ₹15,000 in many states, so this 2014 cap had no basis. So, after consultations we have decided to increase salary cap of ₹25,000," he added.
The proposal from the Ministry of Labour and Employment is aimed at expanding access to provident fund savings, pension benefits and insurance protection for workers earning between ₹15,000 and ₹25,000 a month.
Wider access to EPF, pension, and insurance
At present, employees joining a job at a wage above ₹15,000 per month are not automatically covered under the EPF framework and may remain outside mandatory provident fund, pension and associated insurance protection.
The revised ceiling will bring a larger segment of workers in the ₹15,000–₹25,000 wage band within the ambit of mandatory EPFO coverage, subject to applicable scheme provisions. The move will expand access to the Employees’ Provident Fund (EPF), pension protection under the Employees’ Pension Scheme (EPS) and insurance coverage under the Employees’ Deposit Linked Insurance Scheme (EDLI).
The government said the decision would also help align the statutory contribution and pensionable-wage framework with prevailing wage levels.
Ceiling unchanged for a decade before 2014 revision
The EPFO wage ceiling remained unchanged at ₹6,500 from 2004 until September 2014, when it was raised to ₹15,000. The latest revision comes nearly 12 years after that increase.
The government said sustained wage growth, rising incomes and the expansion of formal employment had created the need to update the threshold. In several states and occupations, minimum wages have also moved closer to the existing ceiling. The proposal is expected to support employment formalisation, worker retention and long-term retirement security by bringing more employees within the statutory social security system.
Government outgo estimated at ₹11,339 crore annually
The proposal underwent inter-ministerial consultations and was recommended by the Expenditure Finance Committee at its meeting on June 16, 2026.
The annual government expenditure under the revised ceiling is estimated at around ₹11,339 crore, compared with the existing annual budgetary support of approximately ₹10,250 crore. The estimated expenditure over five years is around ₹56,696 crore.
The EPFO administers three major social security schemes: the Employees’ Provident Fund, the Employees’ Pension Scheme, and the Employees’ Deposit Linked Insurance Scheme.
According to the latest EPFO data cited by the government, the organisation has around 7.98 crore contributing members across approximately 7.68 lakh contributing establishments. The EPS provides pension benefits to around 82 lakh pensioners while EDLI offers insurance protection linked to EPF membership.