Under existing rules, all employees earning up to Rs 15,000 in basic pay must be enrolled in EPFO schemes.

The Employees’ Provident Fund Organisation (EPFO) may soon undergo one of its biggest policy shifts in a decade, with the government considering a proposal to raise the mandatory salary ceiling for EPF and EPS eligibility from the current Rs 15,000 per month to Rs 25,000. If approved, the move could bring more than one crore additional workers under the provident fund and pension net.

The last revision took place in 2014, when the limit was increased from Rs 6,500 to Rs 15,000. Under existing rules, all employees earning up to Rs 15,000 in basic pay must be enrolled in EPFO schemes, while those above the threshold can be excluded at the employer’s discretion. This has left a large segment of private-sector employees without structured retirement savings.

Speaking at an event in Mumbai, M Nagaraju, Secretary, Department of Financial Services, described the current situation as a “serious concern”, noting that employees earning slightly above Rs 15,000 are often left without pension protection and remain financially vulnerable in old age. He stressed the need to update long-standing rules in line with present-day income levels and rising living costs.

According to a Business Today report, once the EPFO formally proposes the revised ceiling, the Central Board of Trustees could take up the matter early next year. Initial assessments from the Labour Ministry indicate that increasing the threshold by Rs 10,000 could extend pension and provident fund benefits to over one crore new workers.

Employee unions have repeatedly demanded an upward revision, arguing that the present limit fails to reflect inflation and changing salary structures. Retirement experts agree, warning that most Indian workers still lack dependable long-term savings instruments. A higher EPF cap, they say, would automatically bring a larger workforce into formal social-security systems.

For employees, the shift would translate into higher monthly contributions, a larger accumulated EPF corpus, and potentially higher pension payouts in the future. Both workers and employers currently contribute 12% of basic salary to EPF, which means employer costs would also rise. Even so, the proposal is being viewed as a strong step toward bolstering financial security for millions.

The EPFO currently manages assets of around Rs 26 lakh crore and has about 7.6 crore active members. An expanded salary threshold could substantially widen its coverage and is being seen as a potential landmark social-security reform of the past decade.