EPFO Wage Ceiling Raised to ₹25,000: What Changes in Your PF, Pension and Insurance
The wage ceiling for compulsory Provident Fund (PF) coverage has been raised from ₹15,000 to ₹25,000 a month, with effect from 17 September 2026. The wage ceiling is the salary limit up to which PF membership is compulsory and PF is calculated.
The Union Cabinet approved the change on 16 September 2026. The Ministry of Labour and Employment then notified it under the Code on Social Security, 2020 (Notification S.O. 5109(E), dated 17 September 2026).
This is the first revision since September 2014. Earlier in 2026, the Supreme Court had asked the Centre and the Employees' Provident Fund Organisation (EPFO) to decide on revising the ceiling within four months.
The contribution rates do not change: 12% from the employee and 12% from the employer. Only the salary on which they are calculated goes up. For a worker at ₹25,000, the amount going into the PF account each month becomes ₹3,917 (₹3,000 from the employee plus ₹917 from the employer).
The Union Cabinet expects more than 51 lakh additional workers to come under compulsory PF, pension (EPS) and life insurance (EDLI) cover. Some estimates put the number close to one crore.
The Centre's pension support (1.16% of wages) also rises. The government has estimated a 5-year outlay of ₹56,696 crore, or about ₹11,339 crore a year.
Employees' Provident Fund Organisation (EPFO)
The Employees' Provident Fund Organisation, or EPFO, is a government body that runs India's biggest retirement savings system for salaried workers. Every month, a part of a worker's salary and an equal amount from the employer go into a savings account called the Provident Fund (PF). This money earns interest and grows over the years. The worker gets it back at retirement, or earlier for needs like a house, marriage or illness.
The EPFO's compulsory coverage depends on the wage ceiling. By raising it to ₹25,000, the government has brought workers earning between ₹15,001 and ₹25,000 into compulsory PF, pension and insurance. For existing members, the PF contribution is now calculated on a larger salary, so more money goes into their accounts each month.
Employees' Pension Scheme (EPS), 1995
The Employees' Pension Scheme, or EPS, is a scheme that gives a monthly pension to workers who are members of the EPFO. It is paid after retirement, and also to the family if the worker dies. The money comes from a part of the employer's PF contribution, plus a small share from the Central Government. The worker does not pay anything directly into EPS.
With the ceiling at ₹25,000, the employer's EPS share and the Centre's 1.16% are now calculated on a larger wage. This means a bigger pension fund for newly covered and existing members over time. It is also why the government's yearly pension support rises to about ₹11,339 crore.
Code on Social Security, 2020
The Code on Social Security, 2020 is a single law that brings together India's main social security laws. Social security means protection for workers against life's risks: old age, illness, injury, death, job loss and childbirth. Instead of nine separate laws, employers and workers now follow one Code. It also, for the first time, gives legal recognition to gig and platform workers.
The new ₹25,000 PF wage ceiling was notified under the Code on Social Security, 2020, which now contains the Provident Fund law. The Code's single definition of "wages" decides what part of pay counts for PF, so together with the higher ceiling, it shapes how much goes into each worker's PF account.
- New PF wage ceiling: ₹25,000 per month (was ₹15,000 since 1 September 2014)
- Effective date: 17 September 2026; Cabinet approval: 16 September 2026
- Notification: S.O. 5109(E), dated 17 September 2026, under the Code on Social Security, 2020
- Contribution rates unchanged: 12% employee + 12% employer
- At ₹25,000 wage: employee ₹3,000; employer EPS ₹2,083; employer EPF ₹917; EPF account gets ₹3,917 a month
- Employer's total cost at ₹25,000: 13%, or ₹3,250 (including EDLI 0.5% and admin 0.5%)
- Workers expected to be newly covered: more than 51 lakh (Cabinet estimate)
- Centre's 1.16% EPS support: about ₹11,339 crore a year; 5-year outlay ₹56,696 crore
- EPF interest rate for 2025-26: 8.25%
- EPS minimum pension: ₹1,000 per month; EDLI cover: ₹2.5 lakh to ₹7 lakh