Cabinet takes major decision on EPF, raising minimum salary limit from ₹15,000 to ₹25,000..

The Central Government has decided to raise the wage limit for EPF and EPS coverage from ₹15,000 to ₹25,000. This decision was taken during a Union Cabinet meeting chaired by Prime Minister Narendra Modi on Wednesday. While announcing the Cabinet's decision, Union Minister Ashwini Vaishnaw stated that the government took this significant step on the occasion of Vishwakarma Jayanti.

Increasing the wage limit will bring more employees under the ambit of social security schemes like EPF and EPS. This move is expected to enhance retirement savings and social security coverage for employees.

**Benefit for over 51 lakh additional employees**
The Union Minister stated, "The Union Cabinet, chaired by Prime Minister Modi, has approved the proposal by the Ministry of Labour and Employment to raise the wage limit for mandatory coverage under the Employees' Provident Fund Organisation (EPFO) from ₹15,000 to ₹25,000 per month. This decision is expected to bring more than 51 lakh additional employees under the scope of mandatory EPFO ​​coverage, thereby significantly expanding the social security net for workers."

**Wage limit was last raised in 2014**
There was no change in the EPFO ​​wage limit between 2004 and 2014, but it was raised to ₹15,000 in September 2014. The current decision takes this process further by raising the limit to ₹25,000. This move aims to account for the consistent rise in wages, increasing incomes, and the expansion of formal employment observed over the past few years.

Since the last revision of the wage limit in September 2014, India has witnessed a steady rise in wages, growing incomes, and an expansion of formal employment. In many states and sectors, minimum wages have also approached the existing limit. Therefore, raising the limit to ₹25,000 aligns the EPFO ​​framework with rising wage levels, enabling a larger number of employees to access formal social security benefits.

**What is the current provision, and how will this be beneficial?**
Currently, if a new employee starts a job with a salary exceeding ₹15,000 per month, they do not automatically fall under the EPF framework and may remain outside the ambit of mandatory provident fund, pension, and associated insurance coverage. Raising the wage limit to ₹25,000 will bring a significant segment of employees earning between ₹15,000 and ₹25,000 under the statutory social security framework. This move is expected to boost the formalization of employment, improve employee retention, and enhance long-term post-retirement security.

**Access to schemes like EPS and EDLI**
This approval will expand access to provident fund savings, pension security under the Employees' Pension Scheme (EPS), and insurance coverage under the Employees' Deposit Linked Insurance Scheme (EDLI), in accordance with the provisions of the respective schemes. It will also help better align statutory contribution and pensionable salary frameworks with current wage levels.

By automatically bringing more employees under the ambit of statutory social security, this decision reinforces the principle that formal employment should be accompanied by portable and assured social security. For employers, expanding the scope of social security can aid in employee retention, workforce stability, and boosting morale, while creating a workforce prepared for a more secure future.

**Increased burden on the exchequer**
This proposal underwent detailed inter-ministerial consultations and was recommended by the 'Expenditure Finance Committee' during a meeting held on June 16, 2026. The government's annual expenditure is estimated to be around ₹11,339 crore, compared to the current annual budgetary support of approximately ₹10,250 crore. The estimated expenditure over five years could be approximately ₹56,696 crore.

Today, the EPFO ​​operates one of the world's largest social security systems, managing the Employees' Provident Fund (EPF), the Employees' Pension Scheme (EPS), and the Employees' Deposit Linked Insurance Scheme (EDLI).

According to the latest EPFO ​​data, around 7.98 crore members across approximately 7.68 lakh contributing establishments are making contributions, while the EPS provides pension benefits to about 82 lakh pensioners. The EDLI offers insurance coverage linked to EPF membership.

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