The statutory wage ceiling for mandatory EPFO coverage has risen from Rs 15,000 to Rs 25,000 a month, effective September 17, 2026. This is the first revision in 12 years.

The change was approved by the Union Cabinet on September 16 and notified as S.O. 5109(E) under the Code on Social Security, 2020. Employees earning between Rs 15,001 and Rs 25,000 who were earlier outside mandatory cover are now included.

At the ceiling, the employee’s 12 percent contribution rises from Rs 1,800 to Rs 3,000 a month. The employer’s matching share rises too, with the pension scheme portion going from Rs 1,250 to Rs 2,083 and the insurance cover maximum from Rs 75 to Rs 125.

Take-home pay may fall for affected workers, but retirement savings will grow. The government estimates more than 51 lakh employees could come under EPFO coverage.

The labour ministry has told employers not to cut statutory wages or pass the extra cost to employees through CTC adjustments. Establishments can partly offset the cost through incentives under the Pradhan Mantri Viksit Bharat Rozgar Yojana.