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EPFO Salary Limit: With the new salary limit increase in EPFO, millions of employees will be able to join PF and pension coverage. Find out how much the salary limit could increase.

Salary limit

EPFO Salary Limit: Millions of employees in the country are associated with the EPFO, and for them, their PF account functions like a savings account. Small monthly deductions prove very useful in the long run. The government frequently changes EPFO rules, which impact millions of PF account holders. The government has set a salary limit for joining the EPFO.

Now, there's a plan to increase this limit. If the new limit is implemented, more than 10 million employees will be covered by retirement funds and pension protection. Salary structures have changed over the years, and the old rules no longer meet employees' needs. This is why preparations are underway to increase the salary limit. Let's explain how much the limit will increase.

Currently, the salary limit for mandatory EPFO membership is ₹15,000. However, the government is seriously considering raising it. Under the new changes, this limit could be raised to ₹25,000. If this happens, the biggest benefit will accrue to employees whose basic salary is slightly more than ₹15,000 and who currently remain outside of EPF and EPS coverage. Once the limit is increased, they will be directly covered by the EPFO.

This will benefit both retirement savings and pensions. Government estimates indicate that the ₹10,000 increase in the limit will enable more than 10 million employees to avail themselves of EPF and EPS benefits for the first time. Given rising inflation and current income and expenditure patterns, the old ₹15,000 limit is no longer effective. Therefore, increasing this limit has become crucial.