EPFO Set to Raise Salary Limit for Mandatory PF to ₹25,000

India's Employees' Provident Fund Organisation (EPFO) is reportedly preparing to increase the salary threshold for mandatory Provident Fund contributions.

Under the proposed change, employees earning up to ₹25,000 per month would be required to make PF contributions, according to the source report.

The Provident Fund (PF) is a long-term savings scheme designed to provide financial security to workers after they retire.

A portion of an employee's salary, along with a matching contribution from the employer, is deposited into the fund during their working years.

The report also highlights the related Employees' Pension Scheme (EPS), which determines how much pension a worker receives upon retirement.

Pension amounts under EPS are calculated based on factors such as monthly salary and the number of years an employee has worked.

As an example, the source discusses pension calculations for an employee earning ₹28,000 with 10 years of service.

It further examines how pension outcomes differ for employees who have completed 25 or 30 years in service before retiring.

Such calculations are particularly relevant for private sector employees, who often rely on EPFO schemes for retirement income.

The report additionally references the EDLI scheme, which provides insurance benefits linked to employees covered under EPFO.

Changes to salary limits typically have wide-reaching effects, since they determine how many workers fall under mandatory PF coverage.

An increase to ₹25,000 would likely bring more employees, particularly those on lower and middle incomes, into the PF system.

This could, in turn, affect the pension amounts such employees eventually receive, depending on their years of service and salary trajectory.

The source material does not provide a confirmed implementation date for the proposed salary limit change, nor full details of the revised EPS calculation method.