The Union Cabinet has approved raising the wage limit for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) from Rs.15,000 to Rs.25,000 per month. The Ministry of Labour & Employment announced the decision on 16 September 2026. The move is expected to bring over 51 lakh additional workers into the mandatory social security system.
What has changed
Until now, workers earning above Rs.15,000 per month were not automatically covered by EPFO protections. The new ceiling of Rs.25,000 means that employees earning between Rs.15,000 and Rs.25,000 will now fall under mandatory EPFO coverage for the first time.
Under EPFO, workers receive three forms of protection:
- Provident fund savings through the Employees’ Provident Fund (EPF)
- Pension benefits through the Employees’ Pension Scheme (EPS)
- Insurance protection through the Employees’ Deposit Linked Insurance Scheme (EDLI)
The previous wage ceiling of Rs.15,000 had been in place since September 2014. The Cabinet noted that wage levels have risen substantially since then, and in many states and sectors, minimum wages have moved closer to the old threshold.
The annual cost to the government is estimated at approximately Rs.11,339 crore, compared to the current annual support of Rs.10,250 crore. Over five years, the estimated expenditure is around Rs.56,696 crore. The Ministry of Labour & Employment and EPFO will handle the implementation steps.
What this means for you
If you earn between Rs.15,000 and Rs.25,000 per month and work in the formal sector, you will now automatically receive pension, savings and insurance protection through EPFO. You no longer have the option to remain outside the system. This ensures that a larger section of salaried workers has portable social security benefits that follow them between jobs. Employers may also benefit from better employee retention and stability through wider coverage of the workforce.