EPFO Salary Limit: PF limit to remain at ₹15,000; EPFO ​​shelves plan to raise salary limit..

The Employees' Provident Fund Organisation (EPFO) has deferred its plan to raise the wage ceiling for pension coverage under the EPF scheme from ₹15,000 to ₹25,000. This decision was taken to shield companies from an additional financial burden. If the government were to raise the wage ceiling to ₹25,000 per month, the mandatory EPF contribution would rise to ₹3,000 per month. This is because, under current rules, both the employee and the employer are required to deposit 12% of the employee's basic salary into the EPFO. An increase in the wage ceiling would require both parties to deposit a higher amount each month.

According to government sources, the implementation of the new Labour Codes has led to a 15–20% increase in the statutory liabilities of companies. The IT sector alone has incurred additional expenses exceeding ₹1,000 crore to comply with the new labour laws. A senior government official stated that the government does not wish to impose an additional financial burden on companies at this time. The wage ceiling will be raised, but only after consultations with all stakeholders.

Why has the Employees' Provident Fund Organisation (EPFO) deferred the plan to raise the wage ceiling for pension coverage?
To protect companies from additional financial burden
Due to low employee participation
Due to a lack of government budget
Due to opposition from labour unions

Current wage ceiling is ₹15,000
Currently, a wage ceiling of ₹15,000 per month applies under the EPFO. This limit was last revised in 2014. It serves as the basis for calculating mandatory contributions to the Employees' Provident Fund (EPF) and the Employees' Pension Scheme (EPS). If an employee's basic salary exceeds ₹15,000 per month, they have the option to opt out of the EPF and EPS schemes.

How much PF is currently deposited?

Both the employee and the company are required to deposit 12 percent of the employee's basic salary into the EPFO ​​every month. The employee's entire 12% contribution goes into the EPF account. Of the company's 12% contribution, 8.33% is deposited into the EPS and 3.67% into the EPF. Since the current wage ceiling is ₹15,000, it is mandatory for employees earning up to this limit—and their companies—to deposit a maximum of ₹1,800 per month each into the EPF account.

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