EPFO wage ceiling raised to ₹25,000 in India

The Indian government has increased the mandatory wage ceiling for the Employees' Provident Fund Organisation (EPFO) from ₹15,000 to ₹25,000 per month. This change, cleared by the Union Cabinet, is set to take effect on September 17, 2026.

The hike is expected to bring more than 51 lakh additional employees under mandatory EPFO coverage. Specifically, employees with a basic salary between ₹15,001 and ₹25,000, who were previously excluded from the Employees' Pension Scheme (EPS) if they joined after September 1, 2014, will now qualify for mandatory coverage.

As a result of the new ceiling, the maximum monthly pension under the EPS will rise from ₹7,500 to ₹12,500. The monthly EPS contribution—calculated as 8.33% of the basic salary—will increase from a cap of ₹1,250 to ₹2,083. While this expands social security benefits, it also increases mandatory monthly deductions for eligible workers.

The impact on take-home pay depends on individual company policies. Some employers cap PF contributions at the wage ceiling to maintain higher take-home salaries, meaning the hike would increase deductions for those employees. Other companies deduct 12% of the actual basic salary regardless of the ceiling.