In a significant decision for private-sector employees, the Union Cabinet has approved an increase in the salary ceiling for coverage under the Employees’ Provident Fund (EPF) and Employees’ Pension Scheme (EPS) from Rs 15,000 to Rs 25,000 per month.
The salary ceiling had remained unchanged since September 2014. The latest decision is expected to bring around 51 lakh additional employees earning between Rs 15,000 and Rs 25,000 per month under the revised EPF framework.
According to the government, the estimated annual expenditure on the measure will be around Rs 11,339 crore, while the projected expenditure over five years is approximately Rs 56,696 crore.
The decision follows discussions among various ministries, with the Expenditure Finance Committee recommending the proposal at its meeting held on June 16, 2026. The proposal was subsequently approved by Prime Minister Narendra Modi on September 16.
Three Key Benefits for Employees
The revision is expected to expand social security coverage for millions of workers. Employees covered under the new limit will be eligible for several benefits under the EPF framework.
First, they will have access to regular savings through the Employees’ Provident Fund, helping them build a retirement corpus through statutory contributions.
Second, eligible employees will receive retirement-related pension benefits under the Employees’ Pension Scheme (EPS).
Third, they will also get insurance coverage under the Employees’ Deposit Linked Insurance Scheme (EDLI), subject to the applicable rules.
The government has said that the revised salary ceiling will also bring pensionable wages and statutory contribution arrangements more in line with current salary levels.
The move is expected to widen formal social security coverage among employees in the Rs 15,000–Rs 25,000 monthly salary bracket and strengthen their long-term financial and retirement protection.