EPFO salary limit has been raised from ₹15,000 to ₹25,000 per month after approval from the Union Cabinet. The government says the change will bring more than 51 lakh additional employees under mandatory EPFO coverage.
The decision is particularly important for employees earning between ₹15,000 and ₹25,000 per month. More workers in this salary range will now be brought under the statutory social security system.
EPFO Salary Limit Now ₹25,000
Earlier, the mandatory EPF coverage wage ceiling was ₹15,000 per month. Employees joining with wages above this level were not covered by mandatory EPF membership in every situation.
With the new ₹25,000 threshold, a larger number of employees will become part of the EPFO system. The government expects the move to expand social security coverage among workers.
Workers Will Get PF Pension and Insurance Benefits
Employees covered by EPFO can receive several social security benefits according to the applicable rules. These include savings through the Employees’ Provident Fund and pension benefits under the Employees’ Pension Scheme.
The coverage also includes insurance protection under the Employees’ Deposit-Linked Insurance Scheme. This gives eligible employees access to retirement savings, pension and insurance-related benefits.
Government Will Spend ₹56,696 Crore in Five Years
The increase in the wage ceiling will require additional government spending. Government estimates put the additional annual expenditure at around ₹11,339 crore.
The current annual budgetary support from the government is around ₹10,250 crore. Over a five-year period, the estimated expenditure related to the decision is around ₹56,696 crore.
EPFO Has Millions of Contributing Members
EPFO has a large membership base across the country. According to available data, around 79.8 million members contribute to EPFO, while approximately 768,000 establishments are contributing to the system.
The Employees’ Pension Scheme also provides pension benefits to around 8.2 million pensioners. The new wage ceiling is expected to expand the number of workers covered by this social security framework.