Sunday, October 19, 2025
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Government to Reevaluate Maximum Wage for EPS Contributions

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Union Labour Minister Mansukh Mandaviya recently announced that the Indian government is actively considering removing the existing ceiling for contributions towards the Employees’ Provident Fund Organisation (EPFO) and the Employees’ Pension Scheme (EPS). 

This move aims to enhance social security benefits for workers and streamline the EPFO system.

Current Scenario

At present, EPFO contributions are payable based on a maximum wage ceiling of ₹15,000. Additionally, the pension contribution stands at 8.33% of this maximum wage ceiling.

However, the government recognizes that this limit may be restrictive for many subscribers. 

Approximately 92% of EPFO subscribers pay a consolidated amount, and the proposed change seeks to ease this upper limit, allowing workers to invest more in their provident fund.

Proposed EPFO and EPS Contribution Changes

The Ministry of Labour and Employment has proposed raising the wage ceiling from ₹15,000 to ₹21,000 for calculating employees’ provident fund contributions. 

If implemented, this change would significantly impact both EPF and EPS contributions.

The government is also exploring ways to increase the minimum pension under the EPS. Discussions are ongoing within the Ministry to ensure better financial security for retired workers.

The Ministry plans to move a Cabinet note on the ELI scheme, which was announced in the Union Budget. Details of this scheme are being worked out in collaboration with the Corporate Affairs Ministry.

The eShram portal, which has successfully registered over 30 crore unorganized workers in just three years, will be further enhanced. 

More portals will be linked to eShram, allowing workers to search for jobs and access social security schemes based on eligibility.

The EPFO has extended the limit for auto claim settlement of partial withdrawals from ₹50,000 to ₹1,00,000. This facility now covers housing, education, marriage, and illness-related expenses, significantly reducing processing time.

Impact on EPFO and EPS

If the proposed changes are implemented, employees can expect a more robust social security system.

With the wage ceiling revised, workers will have the opportunity to contribute more towards their provident fund, potentially leading to a larger corpus upon retirement. 

However, these changes must be carefully calibrated to ensure financial sustainability for the EPFO and equitable benefits for all subscribers.


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Sahiba Sharma
Sahiba Sharmahttps://sightsinplus.com/
Sahiba Sharma, Senior Editor - Content at SightsIn Plus