Major changes are coming to the EPFO; find out how much the salary limit will increase.

EPFO Salary Limit: The new salary limit increase in the EPFO ​​will allow millions of employees to join the PF and pension coverage. Find out how much the salary limit could increase.

EPFO Salary Limit: Crores of employees in the country are associated with the EPFO, and for them, their PF account acts as a savings account. Small monthly deductions prove very useful in the long run. The government frequently changes EPFO ​​rules, which impacts crores of PF account holders. The government has set a salary limit for joining the EPFO.

The government is considering increasing this limit. If the new limit is implemented, more than 10 million employees will be covered by retirement funds and pension protection. The salary structure has changed over the years, and the old rules no longer meet the needs of employees. This is why preparations are underway to increase the salary limit. Let's explain how much the limit will increase.

How much will the salary limit increase?

Currently, the salary limit for mandatory EPFO ​​membership is ₹15,000. However, the government is seriously considering raising it. Under the new changes, this limit could be raised to ₹25,000. If this happens, the biggest benefit will be to employees whose basic salary is slightly more than ₹15,000 and who currently remain outside of EPF and EPS coverage. With the increase in the limit, they will be directly covered by the EPFO.

This will benefit both retirement savings and pensions. Government estimates indicate that an increase of ₹10,000 will enable more than 10 million employees to avail themselves of EPF and EPS benefits for the first time. Given rising inflation and current income-expenditure patterns, the old ₹15,000 limit is no longer sufficient. Therefore, raising this limit has become crucial.

How much will employees benefit?

Upon joining the EPFO, employees contribute 12% of their basic salary to the EPF, and the employer contributes an equal amount. Increasing the salary limit means that both contributions will increase. This will accelerate the growth of the EPF balance, providing a strong fund at retirement. Pension coverage will also increase, reducing financial pressure in old age. While costs for companies will undoubtedly increase, this is considered a major step in the interest of employees. Currently, the EPFO ​​has 76 million active members. This increase in the limit will benefit many employees.