According to the report, the central board of EPFO may discuss the proposal in its next meeting. The meeting is likely to be held in December or January. In such a scenario, if the proposal is approved, it will be the first time since 2014 that there has been a revision in the pay cap.
At present joining EPF EPS is mandatory for employees earning Rs 15,000 or less per month. In addition, employees earning more than 15,000 are eligible to opt out of these schemes. At the same time, there is no legal obligation for employers to enroll such employees in EPF or EPS.
The labor union has been demanding an increase in the wage ceiling for a long time. They say that today the salary of working or medium skilled workers in the metropolises is more than 15,000. In such a situation they will not come under the purview of EPFO. However, this problem will be resolved with the implementation of the new limit.
As per the rules, both the employer and the employee contribute 12 percent of the salary every month. Employees’ total share of 12 percent is deposited in the EPF account, while the employer splits 12 percent into two parts.
Of this, 3.67 percent goes to EPF and 8.33 percent to EPS. If the limit is 25,000, the contribution of both employer and employee in the PF account will increase from 1800 to 3000 rupees per month. That means total 2400 more will be deposited.
Due to increase in salary limit, there will be a big increase in the fund of both EPF and EPS. This will increase the pension available at the time of retirement. The amount of interest rate will also increase.
EPFO currently has around 7.6 crore members. Its total fund is around 26 lakh crore rupees.
Published at : 30 Oct 2025 06:19 PM (IST)
