The Indian government is considering a proposal to increase the wage ceiling for mandatory coverage under the Employees’ Provident Fund (EPF) and Employees’ Pension Scheme (EPS) from Rs 15,000 to Rs 25,000 per month. If approved, the move could bring millions of additional salaried employees under mandatory PF and pension coverage.
The proposed change would also affect employees’ monthly take-home salaries and long-term savings, as eligible workers would have PF contributions deducted from their salaries.
Current Rs 15,000 Limit Could Be Revised
The existing mandatory PF wage ceiling of Rs 15,000 was last revised in 2014, when it was increased from Rs 6,500. At present, employees earning up to the applicable threshold are covered under EPF and EPS.
Under the proposal being considered, the ceiling could rise to Rs 25,000 a month. This would extend mandatory PF and pension coverage to a larger section of middle-class salaried workers who currently fall outside the existing limit.
Companies May Continue With Rs 15,000 Contribution Ceiling
To reduce the additional financial burden on employers, the government may allow companies to continue calculating their mandatory contributions using the existing Rs 15,000 wage ceiling, even if the overall coverage limit is increased to Rs 25,000.
Such an arrangement would expand PF coverage for employees while keeping the mandatory employer contribution at the existing level.
The proposal is expected to increase monthly retirement savings for employees earning between Rs 15,000 and Rs 25,000 who were previously outside mandatory PF coverage. Although PF deductions could result in a slight reduction in take-home pay, employees would build higher retirement savings and receive greater social security coverage.
Detailed rules and implementation guidelines from the EPFO are expected after a decision by the Cabinet.
New EPF Scheme Includes Emergency Provision
Meanwhile, the central government has added a special provision to the new Employees’ Provident Fund (EPF) Scheme 2026. Under this provision, PF deductions may be stopped or partially reduced for up to three months during an emergency, pandemic or natural disaster.
The government will decide when such an emergency provision should be activated and will issue a notification accordingly. The relief could be implemented across the country or limited to a particular state or region.
Separately, discussions are also taking place on the possible abolition of the Digital Communications Commission as part of a broader administrative reform in the telecom sector.