There is good news for many private sector employees.
The Finance Ministry has reportedly approved a proposal to increase the EPF and EPS wage ceiling from ₹15,000 to ₹25,000 per month.
The proposal will now be sent to the Union Cabinet for final approval.
The new wage limit will come into effect only after the Cabinet gives its approval, and the official implementation date will be announced later.
What Will Change?
At present, employees with a basic salary of up to ₹15,000 per month are required to be covered under the Employees’ Provident Fund (EPF) and Employees’ Pension Scheme (EPS).
If the proposal is approved, the mandatory coverage limit will increase to ₹25,000.
This means employees earning between ₹15,000 and ₹25,000 in basic pay will also have to be enrolled in EPF and EPS, expanding social security benefits for more workers in the organised private sector.
Government Chose ₹25,000 Instead of ₹30,000
According to reports, the government had initially considered increasing the wage ceiling to ₹30,000.
However, the Finance Ministry has reportedly approved a revised limit of ₹25,000.
The proposal will now be placed before the Union Cabinet for its final decision.
Impact on Employers
If the new wage ceiling is implemented, employers will have to enrol more employees under the EPF and EPS schemes.
This is expected to increase compliance costs for companies.
Under the Employees’ Pension Scheme (EPS), employers contribute 8.33% of an employee’s basic salary to the pension fund, while the government contributes 1.16%.
The government has allocated ₹11,144 crore for the EPS in the Union Budget for 2026-27.
Who Will Be Affected?
The proposed change will apply to organisations with 20 or more employees, where EPF and EPS registration is mandatory.
Employees working in smaller establishments can still join the scheme voluntarily if their employer opts in.
The proposal mainly affects private sector employees.
Central government employees are covered under separate retirement benefit schemes and are not included under EPS.
When Could the New Rule Start?
Even if the Union Cabinet approves the proposal, the revised wage ceiling is not expected to be implemented immediately.
Companies will need time to update their payroll systems and complete other compliance-related changes.
According to reports, the new wage ceiling is likely to come into effect from April 1, 2027, although the final implementation date will be announced only after Cabinet approval.
