New Delhi, 16 September (H.S.): The Central Government has raised the wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) from Rs 15,000 to Rs 25,000 per month. The decision is expected to bring more than 51 lakh additional employees under the EPFO’s social security framework.

The proposal of the Ministry of Labour and Employment was approved at a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi. The increase in the wage ceiling will enable a large section of employees earning between Rs 15,000 and Rs 25,000 per month to access statutory social security benefits.

Union Minister Ashwini Vaishnaw, while briefing the media after the Cabinet meeting, said the decision to raise the wage ceiling was based on the fact that the previous limit of Rs 15,000 had been fixed in September 2014. Since then, average wages have increased significantly, while the cost of living has also risen.

He said the average monthly income of a regular salaried employee is now around Rs 23,000, which is approximately two-and-a-half times the level recorded before 2014. Several states have also raised the minimum wage for unskilled workers beyond Rs 15,000 per month.

According to the government, under the existing system, an employee joining a job with a monthly salary exceeding Rs 15,000 does not automatically come under mandatory EPF coverage. Raising the ceiling to Rs 25,000 will expand access to social security benefits available under the Employees’ Provident Fund (EPF), Employees’ Pension Scheme (EPS) and Employees’ Deposit-Linked Insurance Scheme (EDLI).

The EPFO wage ceiling remained unchanged for a decade from 2004 to 2014. It was raised to Rs 15,000 in September 2014. The government said that in view of the sustained growth in wages and incomes over the past 12 years, along with the expansion of formal employment, raising the ceiling to Rs 25,000 had become necessary.

According to the government, the decision is expected to accelerate the formalisation of employment and strengthen long-term retirement security for workers. Broader social security coverage will provide employees with a more secure financial foundation for the future. For employers, wider social security coverage is also expected to contribute to employee retention and greater workforce stability.

The proposal underwent detailed consultations among various ministries. The Expenditure Finance Committee recommended the measure at its meeting held on June 16, 2026.

The implementation of the decision will impose an additional annual financial burden of approximately Rs 11,339 crore on the government, compared with the existing annual budgetary support of around Rs 10,250 crore. The estimated expenditure over five years is expected to be approximately Rs 56,696 crore.

The EPFO is currently one of the world’s largest social security organisations. It administers the Employees’ Provident Fund, Employees’ Pension Scheme and Employees’ Deposit-Linked Insurance Scheme.

According to the latest figures, the EPFO has around 7.98 crore contributing members and approximately 7.68 lakh contributing establishments. Around 82 lakh pensioners are receiving pension benefits under the Employees’ Pension Scheme.

The Ministry of Labour and Employment and the EPFO will undertake the necessary statutory and administrative measures to implement the decision.

The government said that strengthening the social security system alongside rising wages and the expansion of formal employment is an important step towards achieving the vision of Viksit Bharat@2047.

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Hindusthan Samachar / Jun Sarkar