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Business Desk – EPFO ​​Latest Update: There’s big news for millions of employees associated with the Employees’ Provident Fund Organization (EPFO). The central government is considering raising the wage ceiling for the Employees’ Provident Fund (EPF). If the proposal is approved, the current limit of ₹15,000 could be raised to ₹25,000.

This change could also bring millions of employees earning a basic salary of ₹15,000 to ₹25,000 under mandatory EPF and the Employees’ Pension Scheme (EPS). However, a final decision on this proposal has not yet been made.

The Finance Ministry has approved the proposal, now it is the Cabinet’s turn.

According to media reports, the Department of Expenditure of the Finance Ministry has approved the proposal to increase the salary limit of EPF from Rs 15,000 to Rs 25,000.

The proposal will now be sent to the Union Cabinet for final approval. The date for the new pay scale to come into effect will be determined only after Cabinet approval.

What will be the benefit to the employees when the new limit is implemented?

If the government approves this proposal, then employees earning a basic salary of Rs 15,000 to Rs 25,000 will also be compulsorily covered under EPF and EPS.

This will increase employees’ retirement savings and allow them to benefit from the Employee Pension Scheme (EPS) in the future. This means they will save more in their Provident Fund (PF) while employed, and their financial security after retirement can be strengthened.

What will be the impact on companies?

With the new wage ceilings in place, companies will be required to contribute to EPF and EPS for more employees. This could increase employers’ salary expenses.

Apart from this, companies may also have to make changes in their payroll system, software and other administrative processes to comply with the new rules.

What are the current EPF rules?

As per the current rules, in establishments employing 20 or more employees, it is mandatory for employees drawing a basic salary of up to Rs 15,000 to join EPF and EPS.

Under this scheme, both the employee and the employer contribute 12 percent each. Of the employer’s 12 percent contribution, 8.33 percent (depending on the salary limit) is deposited into the Employees’ Pension Scheme (EPS), while the remaining amount goes into the EPF account.

What are the rules for those earning more than Rs 15,000?

Under the current system, employees earning a basic salary of more than ₹15,000 can voluntarily join the EPF through a joint declaration. This means that joining the EPF is not mandatory for them.

The final decision is still pending

Currently, the proposal to increase the salary limit from ₹15,000 to ₹25,000 is under consideration. Final approval is pending from the Union Cabinet. Only after approval will it be clear when the new salary limit will be implemented and how many employees will benefit from it.