Tuesday, September 2, 2025
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EPFO – Panel backs raising the monthly wage ceiling to Rs. 21,000

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A high-level committee has backed the proposed for increasing in the wage ceiling under the Employees’ Provident Fund Organisation (EPFO) to Rs. 21,000 from the current Rs. 15,000.

However, the panel said the government can implement the increase from a later date after deliberations, according to the media report on Monday.

If the proposal is accepted by the central board of the trustees of EPFO, it will be a benefit for the employers under any reluctance to immediately take on any additional financial burden.

Though, the employers had in their consultations cited stress on their balance sheets as due to the pandemic and sought more time for implementing the proposed increase.

KE Raghunathan, an employer’s representative on the central board of the trustees of the EPFO, said there is a consensus within the EPFO that similar norms should be followed for providing social security under both EPFO and ESIC.

“Workers should not lose out on the benefits of their social security because of the difference in norms under the two schemes,” he said.

Labour unions are, however, apprehensive the decision may take a very long time to implement. As the committee has also said that the government can implement the increase from a later date considering all inputs.

The proposal, once implemented, will bring an estimated 7.5 million additional workers within the fold of the scheme, and also adjust for the increase in wages as the last revision was done in 2014.  

It will also be a relief for the exchequer as the Centre currently pays about Rs.6,750 crores every year to the Employees’ Pension Scheme of the EPFO. The government contributes 1.16% of the total basic wage of EPFO subscribers towards the scheme.

According to the current rule, any company with more than 20 employees must register with the EPFO and the EPF scheme is compulsory for all employees earning less than Rs. 15,000.

The increase in the limit to Rs.21,000 will bring more workers under the retirement scheme. It will also align the ceiling with the other social security scheme Employees’ State Insurance Corporation (ESIC) where the limit is Rs. 21,000.

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Sheenu Pradhan
Sheenu Pradhanhttps://sightsinplus.com/
Sheenu Pradhan, Editor Content, SightsIn Plus. She has over 8 years of experience in human resources. Prior to this, she has been associated with Wictor Chemicals India, Wipro, and Shakti Plas Industry.