EPFO Salary Limit May Rise to Expand Pension Coverage

Jan 12, 2026 - To bring crores of employees under the ambit of social security, the Central Government is preparing to take a major step in this year’s Union Budget. A proposal to increase the Employees’ Provident Fund Organisation (EPFO) monthly salary limit from the existing Rs 15,000 to Rs 25,000-Rs 30,000 is once again under discussion.

The salary limit refers to the basic wage on which it is legally mandatory for an employee to contribute to the Provident Fund (PF)s.

Under the current EPF rules, employees whose basic salary exceeds Rs 15,000 are not eligible to join the Employees’ Pension Scheme (EPS), even if they are members of the EPF scheme. If the EPFO wage limit is increased to Rs 25,000, employees earning above Rs 15,000 in basic salary will also be able to join EPS. This will make them eligible for a monthly pension after retirement.

The government had earlier considered increasing the wage limit to Rs 25,000, but the proposal was postponed owing to opposition from companies, who argued that it would increase their financial burden. Recently, the Supreme Court directed the Ministry of Labour to review the wage limit within four months, noting that the current Rs 15,000 ceiling was fixed back in 2014.

An increase in the wage limit will raise the employer’s contribution towards EPF and EPS. While employees will receive higher pension benefits in the long term, their take-home salary will reduce.

However, this move is expected to benefit lakhs of workers, as minimum wages in most States range between Rs 18,000 and Rs 25,000. Owing to the existing Rs 15,000 limit, many workers are currently deprived of pension, insurance and other social security benefits.

Source: Media Reports

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