The Employees’ Provident Fund Organization (EPFO) is planning to change the limit on the salary of employees to be covered by mandatory Provident Fund (PF) and pension from ₹15,000 to ₹25,000 per month. This decision which will likely be finalized by the beginning of 2026 will certainly improve retirement and pension benefits for more than 10 million private sector workers wanting to come into the social security scheme.
What Is the Salary Ceiling and Why It Matters?
At present, ₹15,000 basic monthly salary is the upper limit for compulsory coverage of workers under EPF and the Employees’ Pension Scheme (EPS). Those getting above this ceiling can voluntarily stop contributing, thus making many middle-income workers unprotected with respect to retirement benefits. The movement of EPFO to raise the limit to ₹25,000 is not without reason; the organization intends to be able to cover more workers under its different schemes, especially in large cities where wages normally surpass the previous threshold.
What Will Change for Employees?
With the new ceiling in place, if approved, the following will happen:
- It would be a must for employees of up to ₹25,000/month to be covered by PF and pension.
- There would be an increase in contributions by both the employer and employee to the EPF account.
- The number of persons eligible for pension under EPS-95 would be growing.
- Long-term savings and retirement security of private sector workers would be enhanced.
This reform can be viewed as a part of the EPFO plan to modernize and expand the social security coverage in the country at large.
EPFO Wage Ceiling Update Summary Table
| Feature | Current Rule | Proposed Update (2025–26) |
|---|---|---|
| Mandatory PF Coverage Limit | ₹15,000/month | ₹25,000/month |
| Eligible Employees | ~4 crore | ~5 crore+ |
| Pension Scheme Inclusion | Optional above ₹15,000 | Mandatory up to ₹25,000 |
| Expected Approval | EPFO Board Meeting (Dec–Jan) | Implementation by early 2026 |
Final Thoughts
The proposed EPFO wage ceiling hike is a major step toward inclusive social security for India’s workforce. By covering more private sector employees, it ensures better retirement planning and financial protection. Workers earning between ₹15,000 and ₹25,000 should prepare for mandatory PF deductions and long-term savings benefits once the rule is implemented.
