New Delhi, September 16, 2026 (Yes Punjab News)
The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday 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, a move expected to bring more than 51 lakh additional employees under the statutory social security framework.
The decision will expand access to provident fund savings, pension benefits under the Employees’ Pension Scheme (EPS) and insurance coverage under the Employees’ Deposit Linked Insurance Scheme (EDLI), subject to the applicable provisions of the respective schemes.
At present, a new employee joining employment at a monthly wage above Rs 15,000 is not automatically covered under the EPF framework. Raising the ceiling to Rs 25,000 will bring a larger section of employees earning between Rs 15,000 and Rs 25,000 within mandatory coverage.
The government said the move would also allow the statutory contribution and pensionable-wage framework to better reflect prevailing wage levels.
The proposal was examined through detailed inter-ministerial consultations and recommended by the Expenditure Finance Committee at its meeting on June 16.
The annual government expenditure arising from the decision is estimated at Rs 11,339 crore, compared with the existing annual budgetary support of around Rs 10,250 crore. The estimated expenditure over five years is approximately Rs 56,696 crore.
The EPFO wage ceiling had remained unchanged between 2004 and 2014 before being raised to Rs 15,000 in September 2014. The latest decision further raises the ceiling to Rs 25,000, with the government citing sustained wage growth, rising incomes and the expansion of formal employment.
The measure is expected to support the formalisation of employment and strengthen long-term retirement security by bringing more workers automatically within the statutory social security system.
The government said wider social security coverage could also help employers by supporting employee retention, workforce stability and morale.
EPFO administers three major social security schemes — the Employees’ Provident Fund, the Employees’ Pension Scheme and the Employees’ Deposit Linked Insurance Scheme. According to the latest data cited in the Cabinet statement, EPFO has around 7.98 crore contributing members across approximately 7.68 lakh contributing establishments, while the EPS provides pension benefits to around 82 lakh pensioners.
The government said the enhancement of the wage ceiling would help ensure that social security coverage keeps pace with rising wages and the expansion of formal employment.
The decision is part of the government’s broader emphasis on employment formalisation and expanding social security protection for workers. Recent government measures have also focused on bringing employees who were previously outside EPF coverage into the formal social security system.
The Cabinet approval is expected to widen the reach of EPFO benefits and strengthen the social security framework for workers as the formal workforce continues to expand.
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