Govt May Raise PF Limit: Good News for Salaried Employees Soon

There’s encouraging news for salaried employees earning above Rs 15,000 a month. The government is once again reviewing the long-pending proposal to raise the salary ceiling under the Employees’ Provident Fund Organisation (EPFO). If approved, the current limit of Rs 15,000 could be increased to anywhere between Rs 25,000 and Rs 30,000, bringing millions more workers under the PF safety net.

Why this change matters

At present, PF contribution is mandatory only if an employee’s basic salary plus dearness allowance (DA) is Rs 15,000 or less. Those earning more can opt in voluntarily, but many remain outside the system. Raising the wage ceiling would automatically include a large section of middle-class employees earning between Rs 15,000 and Rs 30,000 per month.

This means more people saving systematically for retirement, leading to stronger financial security and better pension coverage in the long run.

What is the EPF wage ceiling?

The wage ceiling is the maximum salary up to which PF contributions are compulsory for employees working in EPFO-covered establishments. Currently fixed at Rs 15,000 per month, this limit has not changed since September 2014. Over the past decade, salaries and living costs have risen sharply, but the PF threshold has stayed frozen.

Impact on take-home salary and benefits

If the limit is raised, PF contributions will be deducted from the salaries of newly covered employees. While this may slightly reduce monthly take-home pay, it helps build a solid retirement corpus over time. Employees will also gain access to additional benefits such as the Employees’ Pension Scheme (EPS) and Employees’ Deposit Linked Insurance (EDLI), offering protection beyond just savings.

Why labour unions are pushing for the hike

Labour unions have long argued that the outdated wage ceiling has weakened social security. In many states, even the minimum wage for unskilled workers has crossed Rs 15,000 per month. As a result, millions of low-paid and minimum-wage workers are excluded from mandatory PF coverage despite being most in need of financial protection.

With major changes in salary structures and persistent inflation since 2014, unions believe raising the limit is no longer optional, it’s essential.

The bigger picture

If implemented, the revised EPF salary cap could mark a major shift in India’s social security framework. By widening PF coverage, the move promises greater retirement security, stronger savings habits, and long-term financial stability for millions of working Indians.