The Finance Ministry has sanctioned a rise in the Employees Provident Fund (EPF) wage ceiling to ₹25,000 per month, up from the existing ₹15,000 limit that has been unchanged for more than ten years. The decision will be forwarded to the Cabinet for final approval before it becomes effective.
Until now, only workers earning up to ₹15,000 in basic pay were automatically enrolled in the EPF and the Employees' Pension Scheme (EPS). With the new ceiling, those whose basic salary is between ₹15,001 and ₹25,000 will also be covered.
This change will expand social security coverage for private‑sector employees, adding millions of workers to the mandatory provident fund and pension net. It also means more people will receive retirement benefits that were previously optional.
Employers will see a rise in payroll costs because they must now contribute 8.33% of basic pay to the EPF for a larger portion of their staff. The increased coverage will also raise the number of employees subject to EPS contributions.
The government’s share in the pension fund is 1.16% of basic pay, and the 2026‑27 budget allocates ₹11,144 crore to the EPS. The higher ceiling will therefore push up the government’s financial commitment as well.
The mandatory EPF and EPS rules currently apply only to companies with 20 or more employees. Small firms can join voluntarily but are not forced to, and the change mainly affects organized private‑sector workers, not central government staff.
After Cabinet approval, the ministry expects to give businesses time to adjust payroll systems and compliance processes. The revised wage ceiling may come into force from 1 April 2027, but the exact date will be set once the transition period is finalized.
The wage ceiling was last increased in September 2014, when it was raised to ₹15,000. The new adjustment marks the first change in almost a decade.