New Delhi: The central government has announced a benefit for private-sector employees. While the proposal has received approval from the Finance Ministry’s Department of Expenditure, its actual implementation may take some time. The government intends to raise the salary threshold for mandatory Provident Fund (PF) deductions from ₹10,000 to ₹25,000.
Currently, the EPF salary limit stands at ₹15,000. The Union Cabinet has already approved this proposal. Sources indicate that this move will bring a new group of salaried employees under the ambit of mandatory provident fund and pension plans.
Reports suggest there was initially a proposal to raise the EPF limit to ₹30,000; however, the Department of Expenditure approved increasing it from ₹15,000 to ₹25,000. This proposal will soon be placed before the Union Cabinet.
Proposal to raise the limit to ₹30,000
There was a proposal to raise the EPS limit to ₹30,000. The Department of Expenditure approved increasing it from ₹15,000 to ₹25,000. This proposal will now be submitted to the Cabinet for approval. The previous EPF salary limit of ₹15,000 was set approximately 12 years ago, in September 2014, and there had been long-standing demands to increase it.
Will the burden on companies increase?
Under current EPF and EPS regulations, only employees with a basic salary of up to ₹15,000 per month fall within the scheme’s ambit. Companies are not legally required to enrol employees earning above this amount. Raising the limit will bring employees earning a basic salary between ₹15,000 and ₹25,000 per month under the scheme’s coverage. Furthermore, companies will now be required to make the necessary contributions for a significant portion of their workforce.
This will lead to a substantial increase in payroll costs. Under EPFO regulations, EPF and EPS coverage is mandatory for employees earning a basic salary of up to ₹15,000 per month in registered establishments with 20 or more employees. However, employees earning above this threshold have the option to opt out or voluntarily join the scheme through a joint declaration.
Interest Credited to Accounts
The EPFO has transferred the interest amount to the PF accounts of employees. This interest pertains to the 2025-26 financial year. The Central Government had announced an interest rate of 8.25 per cent; there was no change compared to the previous year. PF account holders can easily check the interest amount via a missed call, SMS, or the UMANG app without any hassle. They can also check the interest amount online by visiting the official EPFO website.
