New Delhi Employees in the organized sector earning a monthly basic salary of ₹25,000 may now become eligible for Provident Fund and pension benefits. The Ministry of Finance has approved a proposal to raise the mandatory coverage salary limit under the Employees’ Provident Fund and Employees’ Pension Scheme from ₹15,000 to ₹25,000. The proposal will now be sent to the Union Cabinet for final approval. The new rule will apply to all registered companies with 20 or more employees. The last revision to this limit was made in September 2014. What Was Proposed Earlier According to sources, the Ministry of Labour and EPFO had initially suggested raising the limit to ₹30,000. After detailed review with the Finance Ministry, the cap was finalized at ₹25,000 per month of basic pay plus DA. Current Rule Under existing rules, EPF contribution is mandatory only for employees with basic pay up to ₹15,000. Those earning above that have the option to stay out of EPF. Impact On Companies And Government Finances Raising the salary limit will increase financial liability for both companies and the government. Companies will have to contribute 12% toward PF and pension for more employees, pushing up payroll costs. The government also contributes 1.16% of basic pay to the pension fund. With a higher wage ceiling, the government’s pension subsidy budget will go up too. Post navigation Indian IT Firms Plan to Cut Bench Strength to 8-10% in FY27 as AI Reshapes Hiring
