Cabinet raises mandatory EPFO wage ceiling from Rs 15,000 to Rs 25,000 a month.
More than 51 lakh additional employees are expected to come under EPFO coverage.
Annual government outgo is estimated at Rs 11,339 crore under the revised ceiling.
The Union Cabinet on Wednesday approved raising the wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) from ₹15,000 to ₹25,000 a month.
The move is expected to bring more than 51 lakh additional employees under mandatory EPFO coverage, expanding access to provident fund savings, pension and insurance protection.
The proposal was approved at a Cabinet meeting chaired by Prime Minister Narendra Modi and moved by the Ministry of Labour and Employment.
At present, employees joining employment at a wage above ₹15,000 a month are not automatically covered under the EPF framework. The revised ceiling will bring employees earning between ₹15,000 and ₹25,000 within the statutory social security framework.
The expanded coverage will include access to the Employees’ Provident Fund, pension protection under the Employees’ Pension Scheme (EPS) and insurance protection under the Employees’ Deposit Linked Insurance Scheme (EDLI), subject to applicable scheme provisions.
The EPFO wage ceiling was last revised in September 2014, when it was raised to Rs 15,000. It had remained unchanged for a decade between 2004 and 2014.
The government said the latest increase takes into account sustained wage growth, rising incomes and the expansion of formal employment. It is also expected to give a further push to employment formalisation, worker retention and long-term retirement security.
The proposal underwent inter-ministerial consultations and was recommended by the Expenditure Finance Committee at its meeting on June 16, 2026.
The annual government outgo is estimated at about ₹11,339 crore, against the existing annual budgetary support of around ₹10,250 crore. The estimated expenditure over five years is approximately ₹56,696 crore.
The EPFO administers the Employees’ Provident Fund, Employees’ Pension Scheme and Employees’ Deposit Linked Insurance Scheme. Latest data show around 7.98 crore contributing members across about 7.68 lakh contributing establishments. The EPS provides pension benefits to around 82 lakh pensioners.
The Ministry of Labour and Employment and EPFO will undertake the necessary statutory and administrative steps to implement the decision.
