NEW DELHI
The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a proposal to raise the wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) from Rs 15,000 to Rs 25,000 per month. The move is expected to bring more than 51 lakh additional employees under the statutory social security system.
The decision, based on a proposal from the Ministry of Labour and Employment, will expand access to provident fund savings, pension benefits and insurance protection for employees earning between Rs 15,000 and Rs 25,000 a month.
Under the existing rules, employees joining an establishment with wages exceeding Rs 15,000 per month are not automatically covered under the mandatory EPF framework. The revised ceiling will bring a larger section of workers in the Rs 15,000-Rs 25,000 wage bracket within the ambit of mandatory EPFO coverage, subject to the applicable scheme provisions.
Eligible employees will gain access to the Employees’ Provident Fund (EPF), pension benefits under the Employees’ Pension Scheme (EPS) and insurance coverage through the Employees’ Deposit Linked Insurance Scheme (EDLI).
The government said the revision would align the statutory contribution and pensionable-wage framework more closely with prevailing wage levels. The EPFO wage ceiling had remained unchanged between 2004 and 2014 before being raised to Rs 15,000 in September 2014.
The latest increase comes amid sustained wage growth, rising incomes and the expansion of formal employment over the past decade. The government has also pointed to the rise in minimum wages across several states and occupations, with wage levels in some sectors moving closer to the existing EPFO threshold.
According to the government, expanding mandatory coverage could encourage greater formalisation of employment while strengthening workers’ long-term retirement security. Wider access to statutory social security benefits, it said, could also contribute to workforce stability and employee retention by providing employees with greater financial protection.
Notably, the proposal was examined through inter-ministerial consultations and received the recommendation of the Expenditure Finance Committee at its meeting on June 16, 2026. Further, the annual financial implication of the decision is estimated at around Rs 11,339 crore, compared with existing annual budgetary support of approximately Rs 10,250 crore, according to the government. The estimated financial requirement over five years is projected at around Rs 56,696 crore.
The EPFO administers three major social security schemes — the Employees’ Provident Fund, Employees’ Pension Scheme and Employees’ Deposit Linked Insurance Scheme. Latest EPFO figures cited by the government show that the organisation has around 7.98 crore contributing members across approximately 7.68 lakh contributing establishments. The Employees’ Pension Scheme provides pension benefits to around 82 lakh pensioners, while the EDLI scheme provides insurance protection linked to EPF membership.
The government said the decision was aimed at keeping India’s social security framework aligned with rising wages and the continuing formalisation of employment. The Ministry of Labour and Employment and the EPFO will undertake the required statutory and administrative measures to implement the revised wage ceiling. The move is part of the government’s broader efforts to expand social security coverage and strengthen financial protection for workers as the formal workforce continues to grow.