After 12 years, Centre hikes EPFO wage ceiling to ₹25,000 a month - The Hindu
The Union Cabinet has increased the EPFO wage ceiling from ₹15,000 to ₹25,000 per month, affecting about 51 lakh workers. While contributions and payroll costs will rise, officials say the policy will broaden retirement savings and strengthen social security coverage.
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The Union Cabinet has increased the EPFO wage ceiling from ₹15,000 to ₹25,000 per month, affecting about 51 lakh workers. While contributions and payroll costs will rise, officials say the policy will broaden retirement savings and strengthen social security coverage.
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**Centre Raises EPFO Wage Ceiling to ₹25,000 per Month After 12‑Year Gap**
New Delhi — The Union Cabinet approved a long‑awaited revision of the Employees’ Provident Fund Organisation (EPFO) wage ceiling, lifting the limit from the long‑standing ₹15,000 to ₹25,000 per month. The decision, announced on 30 September, marks the first change to the ceiling since it was last raised in 2012. The move is part of the government’s broader effort to expand social security coverage and align provident‑fund contributions with rising wage levels in the informal and formal sectors alike.
Under the revised rule, employees whose basic monthly wages fall between ₹15,001 and ₹25,000 will now be required to contribute 12 % of their earnings to the Employees’ Provident Fund (EPF), with an equal contribution from their employers. The change is expected to bring roughly 51 lakh workers—predominantly in the organised manufacturing, retail and service sectors—under the EPF umbrella. While the higher contribution will reduce the take‑home salary of affected employees, the government estimates that the long‑term benefit of a larger retirement corpus will outweigh the short‑term deduction. Employers, meanwhile, will see a modest rise in payroll costs, a factor that ministries have urged businesses to accommodate in anticipation of the policy shift.
Industry bodies and labour unions have offered mixed reactions. The Confederation of Indian Industry (CII) welcomed the step as a “positive stride towards inclusive growth,” urging the government to also simplify compliance for small enterprises. Conversely, the All India Trade Union Congress (AITUC) cautioned that the increased contribution could strain low‑wage earners, especially in regions where wage inflation lags behind the new ceiling. The Ministry of Labour and Employment has signalled that it will roll out a phased implementation schedule and conduct outreach programmes to help employers and employees navigate the change.
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