New Delhi, Sept 16: The Union Cabinet on Wednesday approved raising the wage ceiling for mandatory EPFO coverage from 15,000 to 25,000 a month, a move expected to bring more than 51 lakh additional employees under the statutory social-security framework.
The decision, approved at a Cabinet meeting chaired by Prime Minister Narendra Modi, will extend mandatory coverage to a substantial section of employees earning between 15,000 and 25,000 a month, who are currently outside compulsory EPFO coverage when they join employment above the existing threshold.
The expanded coverage will provide access, subject to applicable scheme provisions, to provident fund savings, pension protection under the Employees’ Pension Scheme (EPS) and insurance protection under the Employees’ Deposit Linked Insurance Scheme (EDLI).
The Government said the move would also strengthen employment formalisation and align the EPFO framework with rising wages, incomes and the expansion of formal employment over the past decade.
The EPFO wage ceiling had remained unchanged at lower levels during 2004-2014 before being raised to 15,000 in September 2014. The latest increase to 25,000 is aimed at updating the threshold in line with prevailing wage levels.
The proposal was examined through inter-ministerial consultations and recommended by the Expenditure Finance Committee at its meeting on June 16, 2026.
The annual Government expenditure arising from the decision 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.
The Government said wider mandatory coverage would provide more workers with portable social-security protection and could support worker retention and workforce stability by linking formal employment with assured statutory benefits.
The EPFO currently administers three major social-security schemes—the Employees’ Provident Fund, Employees’ Pension Scheme and Employees’ Deposit Linked Insurance Scheme.
According to the latest EPFO data cited by the Government, 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 the EDLI scheme provides insurance protection linked to EPF membership.
The Government said the higher wage ceiling would enable a larger segment of the formal workforce to automatically come under the social-security framework as wages rise and formal employment expands.
The Ministry of Labour and Employment and EPFO will now undertake the necessary statutory and administrative steps to implement the Cabinet decision.
