EPFO: There is a new update for EPFO members. For employed individuals, the provident fund (PF) plays a crucial role in retirement planning. Recently, the government raised the salary threshold for EPF coverage from Rs 15,000 to Rs 25,000 per month. As a result of this adjustment, a greater number of employees will now be included in social security schemes such as EPF, EPS, and EDLI.

However, a key question arises: which employees are now obliged to join these schemes? Can employees earning a basic salary below Rs 15,000 also participate? Additionally, how much might your monthly PF deduction increase due to the new salary cap? Let’s break this down in straightforward terms.

What has changed for those earning up to Rs 25,000?

The Ministry of Labour and Employment has raised the EPFO salary limit from Rs 15,000 to Rs 25,000 per month, effective from 17 September 2026. Employees working in EPFO-registered establishments with a fixed salary between Rs 15,000 and Rs 25,000 per month are now mandatorily covered under the EPF, EPS, and EDLI schemes. This amendment is expected to directly affect employees who were previously excluded from mandatory inclusion in these schemes due to the earlier Rs 15,000 threshold.

What about those earning less than Rs 15,000?

If your basic salary is under Rs 15,000, there is no cause for concern. Employees earning less than this amount can still become members of EPF, EPS, and EDLI. In other words, the increase in the salary limit does not mean that lower-paid employees will lose PF coverage. Instead, it broadens the reach of social security schemes to include more employees earning up to Rs 25,000.

What distinguishes EPF, EPS, and EDLI?

These three schemes serve different purposes, offering retirement and social security benefits to employees.

1- EPF: Savings for retirement

EPF is funded through regular contributions from both employee and employer. These funds are credited to the employee’s account and earn interest. Currently, the EPF interest rate stands at 8.25%. Consistent contributions over an extended period can lead to significant retirement savings.

2- EPS: Pension after retirement

The EPS (Employees’ Pension Scheme) aims to provide employees with a monthly pension upon retirement. It is a vital social security programme that ensures a steady income after retirement.

3- EDLI: Life insurance support for the family

The EDLI (Employees’ Deposit-Linked Insurance Scheme) is designed to offer insurance coverage to the employee’s family in the event of the employee’s death. While EPF focuses on savings and EPS on pension benefits, EDLI provides financial security for the employee’s family.

Will the new limit increase monthly PF deductions?

The revised salary limit could affect your monthly PF deduction. PF contributions are usually calculated as a percentage of salary. For example, if an employee’s PF salary is Rs 20,000 and the employee contribution rate is 12%, the monthly deduction would be Rs 2,400. By contrast, a 12% contribution on Rs 15,000 would be Rs 1,800. Therefore, with the new salary limit, some employees may need to contribute a higher amount to their PF each month.

Higher PF deductions will increase retirement savings

One benefit of increased PF contributions is that the total balance accumulated in an employee’s account can grow. This amount also earns interest. For employees earning between Rs 15,000 and Rs 25,000, the new limit can help boost retirement savings. Those who previously contributed based on the Rs 15,000 ceiling may now see larger sums deposited into their PF account. However, the actual increase in contributions will depend on the salary figure used for PF calculations.

What is the most important thing for employees?

The new Rs 25,000 salary limit means more employees can benefit from schemes like EPF, EPS, and EDLI. While some may see their monthly PF deductions increase, they may also benefit from having more money deposited into their retirement funds. Employed employees should be aware of their salary structure, PF allowance, and employer contributions. This will make it easier to understand how the new salary limits will impact their take-home pay and future savings. Keep in mind that PF, pension, and insurance regulations may vary depending on the employee’s job, salary structure, and the status of the establishment. Therefore, it’s best to confirm information with your HR department or the EPFO ​​for any individual case.