Wage ceiling under EPFO to be raised steeply to Rs 30,000/month
In a major move that could expand social security coverage to millions of workers, the government is considering raising the wage ceiling for mandatory inclusion under the Employees’ Provident Fund Organisation (EPFO) and the Employees’ State Insurance Corporation (ESIC). The ceiling, currently set at ₹15,000 for EPFO and ₹21,000 for ESIC, may soon be increased to ₹30,000 per month, according to official sources.
What’s in it for You?
- Increased Social Security Coverage: Over 10 million additional workers could now be eligible for EPF and ESI benefits, especially those earning between ₹15,000 and ₹30,000 monthly.
- Higher Retirement Corpus: For employees earning ₹30,000, mandatory EPF contributions will double from ₹1,800 to ₹3,600 monthly, significantly increasing retirement savings and pension payouts.
- Enhanced Employer Contributions: Employers will also contribute a matching amount, boosting the overall benefits for employees in the long run.
Why This Change?
Rising wages, especially in urban areas, have rendered the current thresholds outdated. Workers in sectors like security, housekeeping, and driving often earn beyond ₹15,000, leaving them outside the current social security umbrella. Raising the ceiling ensures broader inclusion and protection for these workers.
When Will This Happen?
The proposal was discussed at the recent EPFO Central Board of Trustees (CBT) meeting, with further deliberations expected in February 2025. With widespread support from stakeholders, implementation could begin soon after approval.
A Broader Perspective
Currently, EPFO has around 70 million active subscribers, and this change could significantly boost participation. Since 2014, the EPFO wage limit has only been revised once (from ₹6,500 to ₹15,000), highlighting the need for a contemporary update to reflect current economic realities.
Stay tuned for updates as the February meeting unfolds the final decision.
Source: Financial Express
