India Proposes Raising Mandatory Pension Wage Limit to ₹25,000

The Government of India is proposing to increase the mandatory wage ceiling for the Employees’ Provident Fund (EPF) and Employees’ Pension Scheme (EPS) from ₹15,000 to ₹25,000 per month. This expansion would mandate coverage for millions of private-sector employees earning basic monthly salaries between the two thresholds, providing them with guaranteed access to retirement savings and pension benefits.

The Ministry of Finance of India has approved the proposal, which now awaits final clearance from the Union Cabinet. While officials reportedly considered a higher limit of ₹30,000, the current proposal remains at ₹25,000. The mandate applies to establishments with 20 or more workers, although smaller firms may register voluntarily.

If implemented, the change will increase salary-related expenses for eligible businesses and raise government spending on pension contributions, as the central government currently contributes 1.16% of an employee's basic salary toward the pension fund. To allow companies time to adjust payroll and compliance systems, the revised ceiling is expected to take effect on April 1, 2027, though this date remains unconfirmed pending final approval.