The move is expected to bring more than 51 lakh additional employees under mandatory EPFO coverage, widening access to provident fund, pension and insurance benefits under the applicable scheme provisions.
The EPFO wage ceiling was last raised to ₹15,000 per month in September 2014. The government said the latest increase takes into account sustained wage growth, rising incomes and the expansion of formal employment since the previous revision.
At present, a fresh employee joining employment at a wage above ₹15,000 per month is not automatically covered under the EPF framework. With the ceiling raised to ₹25,000, employees in the ₹15,000–₹25,000 wage band are expected to come within the scope of mandatory coverage.
The expansion will cover access to savings under the Employees’ Provident Fund (EPF), pension protection under the Employees’ Pension Scheme (EPS) and insurance protection under the Employees’ Deposit Linked Insurance Scheme (EDLI), subject to the respective scheme provisions.
Government expenditure
The annual government outgo from the measure is estimated at about ₹11,339 crore, compared with existing annual budgetary support of about ₹10,250 crore, according to the Cabinet release.
The estimated expenditure over five years is approximately ₹56,696 crore.
The proposal was examined through inter-ministerial consultations and was recommended by the Expenditure Finance Committee at its meeting on June 16, 2026.
EPFO coverage
The government said the higher ceiling is aimed at expanding formal social-security coverage as wages and formal employment have increased.
According to the latest EPFO data cited in the release, the organisation has around 7.98 crore contributing members across about 7.68 lakh contributing establishments. The Employees’ Pension Scheme provides pension benefits to around 82 lakh pensioners, while EDLI provides insurance protection linked to EPF membership.
The Ministry of Labour and Employment and EPFO will now undertake the necessary statutory and administrative steps for implementing the decision.
First Published: Sept 16, 2026 3:16 PM IST
