Will wage ceiling for EPFO’s retirement saving scheme be revised?

The mandatory contribution may be raised for both employees and employers, resulting in a bigger retirement corpus


As per media reports, there is a likelihood of the Government revising the wage limit for the retirement saving scheme of the Employees’ Provident Fund Organisation’s (EPFO). Presently, the ceiling is Rs 15,000 per month for the retirement scheme, which can be availed only by establishments that have over 20 members in their workforce.

As per ET, this modification will result in a hike in the mandatory contribution of the employees and employers, which will ensure that the subscribers end up saving more for their retirement. This is also expected to increase the number of workers covered under the EPFO’s social security. It is estimated that about 7.5 million more workers will become part of EPFO, which is already managing social-security deposits of about 68 million subscribers right now. However, it will raise the yearly wage cost for employers.

The last time the ceiling was revised was eight years ago, when it was raised from Rs 6,500 per month to Rs 15,000.

To fix a higher wage ceiling, a committee of experts is expected to be formed soon. The ceiling will then be fixed taking into account the inflation.

With this move, it will become compulsory for the workers in the organised sector whose monthly income is below Rs 15,000 to be part of the Employees’ Provident Fund (EPF). Also, the employers as well as the employees will have to compulsorily contribute towards EPF at the rate of 12 per cent on wage of limit of Rs 15,000.


  1. In light of recent Supreme Court judgement what directions EPFO is giving to retired employees and their employers to calculate higher pension is not clear.

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