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By:

Sumit Ranjan Das

21 August 2024 at 4:08:59 pm

EPFO’s Big Wage-Band Reset

Twelve years is a long time for a wage ceiling to remain unchanged. The last revision came in September 2014, when the limit was raised from Rs.6,500 to Rs.15,000. Last week, the Union Cabinet approved another increase, taking the ceiling to Rs.25,000 a month with effect from 17 September 2026. The government’s estimate is that more than 51 lakh additional employees will come within mandatory EPFO coverage as a result of the change. For employers and payroll professionals, however, the...

EPFO’s Big Wage-Band Reset

Twelve years is a long time for a wage ceiling to remain unchanged. The last revision came in September 2014, when the limit was raised from Rs.6,500 to Rs.15,000. Last week, the Union Cabinet approved another increase, taking the ceiling to Rs.25,000 a month with effect from 17 September 2026. The government’s estimate is that more than 51 lakh additional employees will come within mandatory EPFO coverage as a result of the change. For employers and payroll professionals, however, the headline number is only the starting point. The more important questions are who will be covered, which wages will be taken into account and how the revised provisions will be implemented. Wage Ceiling The existing wage ceiling of Rs.15,000 a month is being raised by Rs.10,000, or 66.7 percent, to Rs.25,000. The change takes effect from 17 September 2026 and marks the first revision since September 2014. The government expects more than 51 lakh additional employees to be covered. Estimated expenditure is about Rs.56,696 crore over five years, while annual government outgo is expected to rise to approximately Rs.11,339 crore. The standard contribution remains 12 percent each from the employee and employer, subject to applicable provisions. The Cabinet said the decision will expand access to provident-fund savings, pension protection under the Employees’ Pension Scheme (EPS) and insurance protection under the Employees’ Deposit Linked Insurance Scheme (EDLI), in accordance with the applicable scheme provisions. The wage ceiling is not merely an administrative threshold. It determines the point at which mandatory EPF coverage applies under the existing framework. At present, a fresh employee joining employment at wages above Rs.15,000 a month is not automatically brought within mandatory EPF coverage and may remain outside mandatory provident-fund, pension and associated insurance protection, subject to applicable statutory provisions. The revised ceiling will bring a substantial section of employees earning between Rs.15,000 and Rs.25,000 within the mandatory coverage framework. The government has also quantified the fiscal impact. The estimated expenditure is about Rs.56,696 crore over five years, while annual government outgo is expected to rise to approximately Rs.11,339 crore, compared with existing annual budgetary support of about Rs.10,250 crore. The Labour Ministry has linked the revision to sustained wage growth, rising incomes and the continued expansion of formal employment since the previous revision in 2014. Payroll Illustration Consider an employee earning Rs.22,000 a month who becomes subject to mandatory coverage under the revised ceiling. At the standard 12 percent contribution rate, if the full eligible wage is used as the contribution base, the employee’s contribution would rise from Rs.1,800 to Rs.2,640 a month, while the employer’s contribution would similarly rise from Rs.1,800 to Rs.2,640. Total monthly contributions would therefore increase from Rs.3,600 to Rs.5,280 — a combined increase of Rs.1,680. However, this should not be treated simply as Rs.1,680 of additional employee savings. Contributions are allocated between EPF and EPS components as prescribed, with the EPF component accumulating in the employee’s account and the EPS component providing pension benefits subject to scheme conditions. The Rs.22,000 example is illustrative, not a universal payroll formula. The final treatment of wage components, existing employees in this band, EPS allocation and transitional matters will depend on the statutory notification and EPFO implementation instructions. For payroll professionals, the immediate task is to assess the operational impact. Key questions include the effective date for existing employees and new joiners, which wage components will count towards PF, whether the 10 percent concessional rate for notified establishments will continue, how the revised ceiling will interact with EPS pensionable wages, and what changes will be required in payroll systems. The Cabinet approval establishes the policy decision; the formal Gazette notification and EPFO instructions will determine how it is translated into payroll processes. The revised ceiling is the first increase since September 2014 and is expected to bring more than 51 lakh additional employees, particularly those in the Rs.15,000-Rs.25,000 wage band, under mandatory EPFO coverage. For them, the change can expand access to provident-fund savings, EPS pension and EDLI insurance, subject to scheme provisions. For employers, it means reviewing payroll costs, employee data, eligible wage components, contribution calculations and compliance systems. The government has described the move as part of efforts to extend statutory social security and strengthen formal employment. The policy has been announced. For payroll professionals, the next chapter is implementation. (The writer is a Cost and Management Accountant and founder of TaxoDas. Views personal

Battered but not beaten

Quaid Najmi
Dec 22, 2025
2 min read

Congress vows to go alone in BMC polls

Mumbai: Rubbishing soothsayers’ predictions of political irrelevance in the just concluded polls to 288 municipal councils and Nagar Panchayats in the state, the Maharashtra Congress claimed it has made a strong comeback with a notable performance.


The party independently secured 41 posts of Municipal Presidents and 1,006 Councillor seats, plus 7 Municipal Presidents and 154 Councillors from Congress-supported local alliance, said state party President Harshwardhan Sapkal.


Conceding that polls bring both wins or losses, Sapkal said “the Congress has survived many such seasons in its long political journey”, while party leaders reiterated that it will “go solo in the BMC elections and in other civic bodies, local-level partnerships will be forged as directed by the AICC high command”.


“The results are a clear verdict in favour of democratic values over money power. Our performance again proved that ‘trust is greater than money and ideology is more important than power’. Despite limited resources and no access to state machinery, we fought with courage, conviction, grassroots mobilisation and structural strength, that have unnerved the ruling dispensation,” thundered Sapkal.


Organisational Push

The organisational push was aggressively led by Sapkal himself, along with senior leaders M. Arif Naseem Khan and Vijay Wadettiwar and a few others who campaigned vigorously across regions, including weak pockets.


“The results are a fitting reply to those who keep prophesying that the Congress is finished. The voters have decisively rejected attempts to fracture social harmony in the name of caste and religion. They have given thumbs up to the Congress ideology which alone can safeguard the nation,” Sapkal contended.


“In this ideological battle, we have not strayed even an inch. Congress lives in peoples’ hearts. We thank all our workers, candidates and voters for their support and reposing faith in us. We are now preparing for the upcoming Municipal Corporations and Zilla Parishad polls to save the state from the corrupt Mahayuti regime,” declared Sapkal.


Pep talk masks a saga of Sabotage

Behind the post-results optimism and celebratory rhetoric lies a more troubling development - of alleged sabotage and aloofness by several regional and state-level leaders during the recent civic polls, party insiders claim.


Despite the official display of ‘collective effort and ideological resolve’, the ground reality was very different and may have cost the party at least 35-40 posts of Municipal President and nearly a 1000-plus Councillors.


Multiple functionaries commended how the Sapkal-Khan-Wadettiwar trio carried out the campaign almost single-handedly, wading “neck deep” into rallies, meetings and field mobilisation, but most influential leaders chose to keep away.


“Many didn’t bother to lift a finger, even in their own strongholds. Attempts to rope them in joint rallies even in their own strongholds failed; their phones were either not-reachable or switched-off,” confided a senior office-bearer, preferring anonymity.


This proved deeply frustrating for everyone, especially grassroots workers who were valiantly battling the well-oiled Mahayuti campaign machinery on the ground, he pointed out.


Concurring, another senior functionary said that if the local satraps had given a united push, the poll results could have altered dramatically and Congress could have exceeded its 2017 performance despite fewer local bodies at the time.

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