IndiaPosted at: Sep 16 2026 4:05PM


EPFO wage ceiling raised to Rs 25,000, over 51 lakh more employees to gain Social Security Cover

New Delhi, Sep 16 (UNI) The union Cabinet on Wednesday approved a substantial expansion of India’s formal social security framework by raising the wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) from Rs 15,000 to Rs 25,000 per month, a decision expected to bring more than 51 lakh additional employees within the statutory ambit of provident fund, pension and insurance benefits.
Announcing the decision after the Cabinet meeting, union Minister for Information and Broadcasting Ashwini Vaishnaw said the enhancement would significantly widen social security coverage while advancing the Government’s employment formalisation agenda. He described the move as part of the broader vision of strengthening retirement security and building the foundations of Viksit Bharat@2047.
The revised threshold will bring a large segment of employees earning between Rs 15,000 and Rs 25,000 a month within mandatory EPFO coverage, subject to applicable statutory provisions. Under the existing ceiling, employees entering employment with wages above Rs 15,000 were not automatically covered under the EPFO framework solely on account of their earnings.
The wage ceiling had remained unchanged between 2004 and 2014 before being increased to Rs 15,000 in September 2014. Twelve years later, the Government has approved a further revision, citing changing wage levels, rising incomes and the continuing expansion of formal employment. The increase is intended to align statutory social security coverage more closely with the evolving earnings profile of workers entering the organised workforce.
The decision is expected to widen access to the Employees’ Provident Fund, pension benefits under the Employees’ Pension Scheme and insurance protection through the Employees’ Deposit Linked Insurance Scheme, subject to the provisions governing each scheme. It also seeks to strengthen the connection between formal employment and long-term financial protection, particularly for workers who previously remained outside automatic mandatory coverage.
The Government has maintained that the existing Rs 15,000 ceiling had become less reflective of prevailing wage conditions, as minimum wages across several States and occupational categories have changed over the years. Raising the threshold to Rs 25,000 is aimed at ensuring that the country’s social security architecture keeps pace with these developments and extends statutory protection to a wider section of the workforce.
Beyond retirement savings, broader EPFO coverage could strengthen the relationship between employers and employees by improving access to structured social security benefits. The Government expects the measure to contribute to workforce stability, employee retention and greater long-term financial security for workers entering formal employment.
The proposal followed inter-ministerial consultations and was recommended by the Expenditure Finance Committee at its meeting on June 16, 2026. The annual Government expenditure arising from the decision is estimated at approximately Rs 11,339 crore, compared with existing annual budgetary support of around Rs 10,250 crore. The estimated expenditure over five years is projected at nearly Rs 56,696 crore.
The EPFO, one of the world’s largest social security institutions, administers the Employees’ Provident Fund, the Employees’ Pension Scheme and the Employees’ Deposit Linked Insurance Scheme. According to the latest available EPFO data cited by the Government, the organisation has around 7.98 crore contributing members across approximately 7.68 lakh contributing establishments, while the pension scheme provides benefits to nearly 82 lakh pensioners. The EDLI scheme offers insurance protection linked to EPF membership.
The Cabinet decision forms part of the Government’s wider employment formalisation and social protection agenda, under which rising wages, economic growth and the expansion of formal employment are expected to be accompanied by stronger institutional safeguards for workers.
By increasing the mandatory coverage threshold, the Government aims to extend statutory social security to millions of employees who previously fell outside automatic EPFO protection. The Ministry of Labour and Employment and the EPFO will undertake the necessary statutory and administrative measures to implement the decision, which the Government has presented as a step towards a more inclusive, resilient and future-ready social security system. UNI SKA AAB
Tags: #EPFO wage ceiling raised to Rs 25#000# over 51 lakh more employees to gain Social Security Cover
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