NEW DELHI — The Union Cabinet on Wednesday approved a proposal to raise the wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) from ₹15,000 to ₹25,000 per month, a move expected to bring more than 51 lakh additional employees under the statutory social security framework.
The decision was taken at a Cabinet meeting chaired by Prime Minister Narendra Modi and is aimed at widening social security coverage for workers and strengthening the formalisation of employment.
The EPFO wage ceiling had remained unchanged from 2004 to 2014 before being raised to ₹15,000 in September 2014. The latest revision seeks to align the threshold with wage growth, rising incomes and the expansion of formal employment.
At present, employees joining an establishment at a wage above ₹15,000 per month are not automatically covered under the mandatory EPF framework, subject to the applicable provisions.
With the ceiling raised to ₹25,000, employees in the ₹15,000 to ₹25,000 wage band will be brought under mandatory coverage, subject to the relevant statutory provisions.
Expanded coverage will provide eligible employees access to provident fund savings, pension protection under the Employees’ Pension Scheme (EPS) and insurance benefits under the Employees’ Deposit Linked Insurance Scheme (EDLI).
The government said the revision would also allow the statutory contribution and pensionable-wage framework to better reflect prevailing wage levels.
It said India had witnessed sustained wage growth, rising incomes and continued expansion of formal employment since the previous revision in 2014. In several states and occupations, minimum wages have also moved closer to the existing ceiling, according to the supplied material.
The government expects the higher ceiling to support employment formalisation, worker retention and long-term retirement security, while broader social security coverage could also contribute to workforce stability.
The proposal underwent inter-ministerial consultations and was recommended by the Expenditure Finance Committee at its meeting on June 16, 2026.
The annual government expenditure under the measure is estimated at around ₹11,339 crore, compared with existing annual budgetary support of about ₹10,250 crore. The estimated expenditure over five years is approximately ₹56,696 crore.
EPFO administers three major social security schemes — the Employees’ Provident Fund (EPF), Employees’ Pension Scheme (EPS) and Employees’ Deposit Linked Insurance Scheme (EDLI).
According to the latest EPFO data cited in the supplied material, the organisation has around 7.98 crore contributing members across about 7.68 lakh contributing establishments. The EPS provides pension benefits to around 82 lakh pensioners, while EDLI provides insurance protection linked to EPF membership.
The government said the measure would expand statutory social security protection to a larger number of workers and help ensure that the framework keeps pace with rising wages and the growth of formal employment.
The Ministry of Labour and Employment and EPFO will undertake the necessary statutory and administrative steps for implementing the decision.
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