The Union Cabinet has approved raising the mandatory coverage wage limit under the Employees’ Provident Fund Organisation (EPFO) from Rs.15,000 to Rs.25,000 per month. The Ministry of Labour & Employment made this proposal, which is expected to bring over 51 lakh additional workers into the formal social security system. The change updates a threshold that had remained at Rs.15,000 since September 2014.
Key details of the decision
Employees earning between Rs.15,000 and Rs.25,000 per month will now automatically fall under EPFO’s mandatory coverage. This expansion brings three forms of protection: provident fund savings through the Employees’ Provident Fund (EPF), pension benefits under the Employees’ Pension Scheme (EPS), and insurance protection via the Employees’ Deposit Linked Insurance Scheme (EDLI).
The government estimates the additional annual cost at approximately Rs.11,339 crore, compared to the current annual budgetary support of Rs.10,250 crore. Over five years, the estimated expenditure is around Rs.56,696 crore. The Expenditure Finance Committee recommended this proposal on 16 June 2026.
Currently, the EPFO operates across about 7.68 lakh establishments with roughly 7.98 crore contributing members. The EPS already provides pension benefits to around 82 lakh pensioners.
What this means for you
If you earn between Rs.15,000 and Rs.25,000 monthly in formal employment, you will now be automatically enrolled in the EPFO system, securing retirement savings and pension protection without needing to opt in separately. Employers will need to contribute to these schemes for eligible employees within this wage bracket. For workers, this means greater financial security in old age and portable social security benefits that follow them between jobs. The Ministry of Labour & Employment and EPFO will handle the implementation steps required to put this change into effect.