New Delhi: The Union Cabinet has approved an increase in 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, taken at a Cabinet meeting chaired by Prime Minister Narendra Modi, will extend access to provident fund savings, pension benefits under the Employees’ Pension Scheme (EPS) and insurance cover under the Employees’ Deposit Linked Insurance Scheme (EDLI), subject to applicable provisions.
Employees joining jobs with wages above Rs 15,000 currently do not automatically come under mandatory EPF coverage. Raising the threshold to Rs 25,000 will bring a significant number of employees earning between Rs 15,000 and Rs 25,000 within mandatory coverage.
The wage ceiling was last revised in September 2014, when it was increased to Rs 15,000. The government said the latest revision takes into account sustained wage growth, rising incomes and the expansion of formal employment over the past decade.
The move is also expected to strengthen formalisation of employment and provide greater retirement security to workers. Wider social security coverage could also help employers improve employee retention and workforce stability.
The proposal followed inter-ministerial consultations and was recommended by the Expenditure Finance Committee at its June 16, 2026 meeting. The annual government expenditure arising from the decision is estimated at around Rs 11,339 crore, compared with the existing annual budgetary support of about Rs 10,250 crore. The estimated expenditure over five years is around Rs 56,696 crore.
EPFO covers nearly 8 crore contributing members
EPFO currently administers three major social security schemes — EPF, EPS and EDLI. According to the latest data, around 7.98 crore members contribute to EPFO through nearly 7.68 lakh establishments.
The EPS provides pension benefits to around 82 lakh pensioners, while EDLI provides insurance protection linked to EPF membership.
The government said the higher wage ceiling would align the statutory social security framework with prevailing wage levels and extend coverage to a larger section of the formal workforce.
The Labour and Employment Ministry and EPFO will undertake the necessary statutory and administrative measures to implement the Cabinet decision.
