The Union Cabinet has approved a proposal to raise the wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) from ₹15,000 to ₹25,000 a month, a move expected to bring more than 51 lakh additional employees within the statutory social security framework.
The decision, taken on a proposal from the Ministry of Labour & Employment, will expand access to provident fund savings, pension benefits and insurance protection for employees in the ₹15,000–₹25,000 monthly wage band, subject to applicable scheme provisions.
Wage ceiling unchanged for 12 years
The EPFO wage ceiling was last revised in September 2014, when it was increased to ₹15,000 a month. Before that, the ceiling had remained unchanged between 2004 and 2014.
The latest increase is intended to align the mandatory coverage threshold with sustained wage growth, rising incomes and the expansion of formal employment over the past 12 years.
At present, a new employee earning more than ₹15,000 a month is not automatically covered under the mandatory EPF framework. The higher ceiling will bring a larger section of such employees within statutory provident fund, pension and insurance protection.
Wider social security coverage
The increase will expand access to three key components administered by EPFO — the Employees’ Provident Fund (EPF), Employees’ Pension Scheme (EPS) and Employees’ Deposit Linked Insurance Scheme (EDLI).
The move will allow more workers to build provident fund savings while providing access to pension and insurance benefits in accordance with the respective scheme provisions.
The government also expects the revised ceiling to enable the statutory contribution and pensionable-wage framework to better reflect prevailing wage levels.
Government expenditure estimated at ₹11,339 crore annually
The proposal underwent inter-ministerial consultations and was recommended by the Expenditure Finance Committee at its meeting on June 16, 2026.
According to the government, the annual expenditure is estimated at around ₹11,339 crore, compared with existing annual budgetary support of approximately ₹10,250 crore.
The estimated expenditure over a five-year period is around ₹56,696 crore.
Formal employment gets a social security push
The government expects the higher wage ceiling to provide an additional impetus to the formalisation of employment and strengthen long-term retirement security.
For workers, wider mandatory coverage would mean greater access to structured retirement savings, pension protection and employment-linked insurance.
For employers, broader social security coverage could contribute to employee retention and workforce stability by providing workers with a more comprehensive formal employment package.
The move comes as India’s formal workforce continues to expand and wages rise across several sectors and regions. In a number of states and occupations, minimum wages have also moved closer to the existing ₹15,000 threshold.
EPFO covers nearly 8 crore contributing members
EPFO currently operates one of the world’s largest social security systems, administering EPF, EPS and EDLI.
The latest EPFO data cited by the government show approximately 7.98 crore contributing members across around 7.68 lakh contributing establishments.
The Employees’ Pension Scheme provides pension benefits to approximately 82 lakh pensioners, while EDLI provides insurance protection linked to EPF membership.
The increase in the wage ceiling is therefore expected to widen the reach of the existing social security architecture rather than create a separate system for newly covered employees.
Implementation steps to follow
The Ministry of Labour & Employment and EPFO will now undertake the necessary statutory and administrative steps required to implement the Cabinet decision.
The government has positioned the measure as part of its broader effort to ensure that social protection keeps pace with rising wages, expanding formal employment and India’s economic growth.