EPF wage ceiling raised to Rs 25,000; 51 lakh more employees to benefit

NEW DELHI: The Union Cabinet has approved raising the wage ceiling for Employees' Provident Fund (EPF) benefits from Rs 15,000 to Rs 25,000 a month, a move that will benefit more than 51 lakh additional employees. The revised ceiling will come into effect from Thursday, Vishwakarma Day, Union Labour Minister Mansukh Mandaviya said. The wage ceiling, fixed at Rs 15,000 in 2014, is being revised after 12 years. It was last increased from Rs 6,500 to Rs 15,000 in September 2014.

Employees covered under the revised ceiling will be eligible for benefits under the Provident Fund Pension Scheme and the Employees' Deposit Linked Insurance Scheme, in addition to the EPF.
At present, both employees and employers contribute 12 per cent of wages towards the PF. With the existing ceiling of Rs 15,000, the maximum monthly contribution is Rs 1,800 each. With the ceiling raised to Rs 25,000, the maximum contribution will increase to Rs 3,000 each.
PF contributions, however, will not be mandatory for employees earning more than Rs 25,000 a month.

The EPF scheme currently covers 7.68 lakh establishments and 7.98 crore employees, while 82 lakh people receive pension benefits.
The increase in the wage ceiling will impose an additional annual financial burden of Rs 11,339 crore on the Centre. The additional expenditure over five years is estimated at Rs 56,696 crore.

Premachandran welcomes decision

N.K. Premachandran, MP, said the decision followed the recommendations of a committee appointed after a private member's Bill he had introduced in Parliament raising the demands of EPF pensioners. He said other recommendations, including an increase in the minimum pension, were also under consideration.