EPFO: New update for EPFO members. If your monthly salary is between Rs 15,000 and Rs 25,000, the new EPFO ​​rule has brought significant changes for you. The government has increased the salary limit for mandatory EPFO ​​coverage from Rs 15,000 to Rs 25,000 per month. This change is effective from September 17th. The government estimates that this will bring more than 5.1 million new employees under the EPFO’s ambit.

What advantages come with earning Rs 20,000?

Imagine you’re starting at an EPFO-registered company with a monthly salary of Rs 20,000. Previously, the Rs 15,000 salary cap meant you couldn’t join the mandatory EPF scheme. Good news—the updated Rs 25,000 threshold now includes you! You’ll gain access to wonderful benefits like building retirement savings through EPF, receiving a pension via EPS, and getting protection through EDLI insurance, as long as you meet the necessary conditions.

How does this affect those earning Rs 10,000?

 

If you’re earning Rs 10,000 monthly, there’s nothing new here for you. Workers making less than Rs 15,000 were already part of the EPFO system under the previous rules.

How it impacts those earning more than 25 thousand?

The updated threshold could also influence current PF members earning higher salaries. In the past, the highest employee contribution was capped at 12% of Rs 15,000, which came to Rs 1,800, based on the salary ceiling. With the fresh Rs 25,000 limit, this could jump to 12% of Rs 25,000, reaching Rs 3,000. That translates to roughly Rs 1,200 being taken out of your PF monthly, which also reduces your take-home amount by the same figure.

EPFO limit refreshed after 12 years

Since September 2014, the Rs 15,000 limit stayed put for about 12 years without any adjustments. Throughout this time, salaries and minimum wages have climbed across numerous states. The government notes that the typical salaried worker now brings home roughly Rs 23,000 each month. Recognizing these shifts, the government bumped the limit up to Rs 25,000. This move is expected to bring over 5.1 million workers into mandatory EPFO participation. The government projects this growth will require around Rs 11,339 crore in yearly spending.