Crores of employees working in the organised private sector have been urging the government to raise the salary ceiling for mandatory Employees’ Provident Fund (EPF) coverage. Their argument is simple — Rs 15,000 per month, the current limit, is outdated and excludes lakhs of workers from formal retirement benefits.
The issue resurfaced in Parliament recently, bringing clarity, concerns and renewed expectations.
The ceiling was last revised over a decade ago
The EPF wage threshold was last increased in 2014, moving from Rs 6,500 to Rs 15,000 per month. Since then, salaries in urban India have risen rapidly, but the EPF ceiling has remained unchanged — a gap worker unions and employee representative bodies say is hurting the workforce.
What the government told Parliament
On December 1, 2025, MPs Benny Behanan and Dean Kuriakose asked whether the government plans to double the EPF eligibility limit to Rs 30,000, and whether gig workers could be brought under the fold.
Responding to the question, Labour and Employment Minister Mansukh Mandaviya said: All employees in establishments registered with EPFO and earning up to Rs 15,000 per month must be mandatorily covered.
There is no minimum wage requirement for enrolment — only a maximum wage cap for compulsory inclusion.
Any revision in the ceiling “is based on stakeholder consultations with unions and industry bodies” because such a change affects both take-home pay for workers and employer hiring costs.
On gig workers, the minister clarified that they are already recognised under the Code on Social Security, 2020, which provides for benefits like health cover, accident insurance, maternity support, old-age protection and a Social Security Fund.
Why the Rs 15,000 cap is being reconsidered
The government has also acknowledged something workers have long said — the current structure leaves many employees without any pension cover.
The government has also recently acknowledged that private-sector employees earning slightly above Rs 15,000 are not enrolled in any pension scheme and may later become financially dependent in old age.
Under today’s rules, EPF enrolment is mandatory only up to Rs 15,000 salary.
Workers earning above it can opt out, and employers are not legally required to register them.
This means thousands of entry-level urban workers — who may earn Rs 18,000–Rs 25,000 — miss out on retirement savings automatically.
Unions want the limit doubled
Labour unions have been demanding a revision to Rs 30,000 per month, arguing that rising living costs and salary levels make the old cap irrelevant.
Government sources and various reports indicate that EPFO may consider increasing the cap to Rs 25,000 in the upcoming Central Board of Trustees (CBT) meeting. If approved, it could be the biggest expansion in EPF coverage in over a decade.
An internal labour ministry assessment estimates:
Raising the limit by Rs 10,000 could bring over 1 crore additional workers into mandatory EPF and pension coverage.
Why the government wants change
The push aligns with its broader focus on strengthening India’s social security system:
Atal Pension Yojana enrolment crossed 8.3 crore, and nearly half the subscribers are women — showing growing demand for retirement safety nets.
Yet, more than two-thirds of Indians still lack life insurance or pension savings.
Young earners often underestimate how much they must save for life after 60.
A higher EPF ceiling forces early retirement saving — something the government believes is essential for future financial stability.
How EPF contributions work today
For every worker covered under EPF:
12% of the employee’s salary is contributed to EPF.
The employer contributes another 12%, which is split into:
8.33% towards the Employees’ Pension Scheme (EPS)
3.67% towards the EPF account
So when the wage ceiling rises, the contribution amounts increase proportionately, meaning:
More money accumulating in EPF, boosting lump-sum retirement savings.
Higher contributions to EPS, which translate into larger pension payouts for life.
What lies ahead
While the government has not committed to a date or amount, its parliamentary reply signals openness to change.
The fact that the issue is moving through consultations, internal assessments and board discussions suggests a decision may not be far off.
For now, millions of private sector employees — especially those earning between Rs 15,000–Rs 30,000 per month — will be watching closely. Any upward revision would mean automatic retirement security, better future pensions and greater long-term savings for India’s workforce.
