EPF: Wage limit raised from ₹15,000 to ₹25,000; how many employees will benefit?

If you are employed and have a basic salary of ₹20,000—meaning you were previously excluded from mandatory EPFO ​​coverage—rules have now been changed. Here are the details.

Salaried employees have PF (Provident Fund) deducted from their pay every month, but this money serves them well in the future. Crucially, a larger number of employees will now fall within this ambit, as the wage limit for mandatory EPFO ​​coverage has undergone a significant revision. The key question now is whether this change will indeed prove beneficial for employees.

What change has been made?

According to reports, a new system has been implemented regarding the EPFO's mandatory coverage wage limit; the threshold has been raised from ₹15,000 to ₹25,000, bringing employees earning up to ₹25,000 under the EPFO ​​coverage umbrella. Most importantly, this move will benefit a vast number of employees.

When will the new system come into effect?

First, let us understand the objective behind this change. The primary aim is to bring a large number of employees under the ambit of benefits like PF and pension, thereby ensuring financial security for their future. According to reports, this new wage limit is set to be implemented starting tomorrow, September 17.

How many employees will benefit?

According to the government, this new change could benefit more than 51 lakh (5.1 million) employees. This means a large number of employees will now be able to contribute to the PF and accumulate funds for their future.

Which employees will benefit the most?

In terms of maximum benefit, those earning a basic salary between ₹15,000 and ₹25,000 stand to gain the most. Previously, employees earning more than ₹15,000 were excluded from the scope of mandatory EPFO ​​coverage. However, now that the new limit has been implemented, they too will be able to join the EPFO.

For instance, if someone earns a salary of ₹22,000, they can now come under the ambit of the EPFO. The biggest advantage of this is that contributions to the PF allow for building savings for the future.