Big relief for private sector workers as EPF wage limit set to increase to ₹25,000

NEW DELHI: The Union Finance Ministry has approved a proposal to raise the monthly wage ceiling for mandatory membership in the Employees' Provident Fund (EPF) and the Employees' Pension Scheme (EPS) to ₹25,000. The proposal will take effect only after receiving approval from the Union Cabinet. If implemented, the move will bring lakhs of additional private-sector employees under the EPF social security net.

At present, mandatory enrolment in EPF and EPS applies only to employees with a basic monthly salary of up to ₹15,000. Employees earning more than that are not required to join the schemes. Under the proposal, employees with a basic monthly salary between ₹15,000 and ₹25,000 will also come within the ambit of mandatory EPF and EPS coverage.

The Employees' Provident Fund Organisation (EPFO) had originally proposed raising the wage ceiling to ₹30,000. However, the Finance Ministry has approved a revised limit of ₹25,000. If the proposal is implemented, the increase in the wage ceiling is expected to expand the number of EPF and EPS subscribers while also increasing the financial liability of employers and the government.