New Delhi: The Union Cabinet has approved an increase in the monthly basic salary ceiling for mandatory coverage under the Employees’ Provident Fund (EPF) scheme, raising it from Rs 15,000 to Rs 25,000.
Under the existing rules, employees drawing a basic salary of up to Rs 15,000 per month must be enrolled in the EPF and the Employees’ Pension Scheme (EPS). Those earning above the ceiling can join on a voluntary basis. The requirement is applicable to establishments employing 20 or more workers.
At present, based on the Rs 15,000 ceiling, an employee contributes 12% (Rs 1,800) and the employer matches it. Of the employer’s share, 3.67% goes to the PF account and 8.33% is routed to the pension scheme.
Information and Broadcasting Minister Ashwini Vaishnaw said the decision was taken at a Cabinet meeting chaired by Prime Minister Narendra Modi in the run-up to Vishwakarma Jayanti. He noted that the existing ceiling was set in 2014 and said the revised limit would bring employees earning up to Rs 25,000 within mandatory coverage.
The minister said around 51 lakh employees are expected to benefit, while the government’s additional annual outgo is estimated at Rs 11,339 crore. With the higher ceiling, the monthly PF contribution could rise to Rs 3,000 from the employee, with a matching amount from the employer, strengthening long-term social security. The revised rules are expected to be implemented after administrative and technical arrangements are completed.
