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Informist, Wednesday, Sept. 16, 2026

 

NEW DELHI - The contribution of employers will increase by an average of INR 600 per employee per month with the revision in the wage ceiling for mandatory coverage under the Employees' Provident Fund Scheme to INR 25,000 per month, a senior official at the labour ministry said Wednesday. The Union Cabinet approved increasing the wage threshold for mandatory coverage from the existing INR 15,000 per month, effective Thursday. Individuals earning more than INR 25,000 per month can join the EPF voluntarily.

 

"The wage ceiling has remained unchanged since September 2014, even though there has been a considerable increase in wages, minimum wages, and the cost of living during this period," Labour Minister Mansukh Mandaviya said Wednesday. "Today, the average income of a regular salaried employee is around INR 23,000, and the minimum wage, including for unskilled workers, in many states has also crossed the INR 15,000 mark."

 

Further, he said, "A fresh employee joining at a wage exceeding INR 15,000 is not automatically covered under the EPF scheme, nor do they qualify for the EPS (Employees' Pension Scheme)." The decision is expected to significantly widen social security protection for workers, the Ministry of Labour and Employment said in a press release. "The measure is expected to give further impetus to formalisation of employment, worker retention, and long-term retirement security," it said.

 

The announcement of an increase in the wage ceiling will cost the government an additional INR 113.39 billion annually. The estimated expenditure over five years is about INR 566.96 billion, the government said in a release.

 

The hike in the wage ceiling will expand access to provident fund savings, pension protection under the Employees' Pension Scheme, and insurance protection under the Employees' Deposit Linked Insurance Scheme.

 

The EPFO has around 79.8 million contributing members across about 768,000 contributing establishments, the ministry said, citing the latest data. The Employees' Pension Scheme provides pension benefits to around 8.2 million pensioners, it added.  End

 

Reported by Shweta

Edited by Himanshi Gupta

 

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