Union Cabinet Raises EPFO Wage Ceiling to INR 25,000; 51 Lakh Workers To Get Social Security Benefits
The Union Cabinet raised the EPFO wage ceiling from INR 15,000 to INR 25,000 per month, benefiting 51 lakh employees with an outlay of INR 11,339 crore. Taking effect on September 17, the change expands mandatory social security and pension coverage. 'Nearly 51 lakh employees will benefit from this. Government expenditure would be INR 11,339 crore,' Vaishnaw said.
The Union Cabinet on Wednesday, September 16, approved a proposal by the Ministry of Labour and Employment to enhance the wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) from INR 15,000 to INR 25,000 per month. The policy change, designed to reflect broader wage growth and expand formal sector social security, is set to come into effect on September 17.
Key Beneficiaries and Financial Impact
Addressing a media briefing, Union Minister Ashwini Vaishnaw detailed the scope and financial implications of the cabinet's decision, reports Moneycontrol. "Nearly 51 lakh employees will benefit from this. Government expenditure would be INR 11,339 crore," Vaishnaw said. How To Join EPFO Official WhatsApp Channel: Step-by-Step Guide for Members and Pensioners.
"This was a demand for long and has now been approved by the PM. This wider security social net will help employees and employers both. Unskilled minimum wage has increased beyond INR 15,000 in many states, so this 2014 cap had no basis. So after consultations we have decided to increase salary cap of INR 25,000," he added. The minister further noted that for new job seekers, "this will increase social security coverage and more employees will get other benefits".
Addressing a Decade-Old Cap
The EPFO wage ceiling remained unchanged for a decade between 2004 and 2014 before being revised to INR 15,000 in September 2014. Officials noted that the latest adjustment to Rs 25,000 accounts for sustained wage growth, rising incomes, and the ongoing expansion of formal employment across the country. Previously, fresh employees joining the workforce with wages exceeding INR 15,000 per month were excluded from automatic, mandatory provident fund coverage. Raising the threshold brings a significant demographic of workers earning between INR 15,000 and INR 25,000 directly into the statutory social security net. EPFO Registrations: Gen Z Accounts for 79% of New Sign-Ups in FY26, Report Finds.
Expanded Protection and Benefits
According to the official statement, the approval extends critical financial safeguards to a broader segment of the workforce. Workers newly covered under the updated ceiling will gain access to:
- Provident fund savings accumulation
- Pension protection via the Employees’ Pension Scheme (EPS)
- Insurance coverage through the Employees’ Deposit Linked Insurance Scheme (EDLI)
The structural update ensures that statutory contribution frameworks and pensionable wage levels better align with prevailing economic standards.
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(The above story first appeared on LatestLY on Sep 16, 2026 03:49 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
