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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

Beyond Marks: Guiding Children with Support and Empathy

Correspondent
May 26, 2025
3 min read

Marks do not define a child's worth. Build trust, listen with empathy, and help them rise with confidence and clarity.

The X Board results are out, ending the anxiety for both parents and children. Often, parents worry more about the future, while children feel pressured to meet expectations. Parents must offer support, empathy, and understanding, rather than focusing solely on marks and percentages.


In a career span of 17 long years as an educator, my observation and inference suggest a few guidelines for parents and children once the results are out.


For Parents

Stay composed and supportive: Parents need to be highly supportive, remain calm, and not subject the child to pressure in choosing a stream or to pursue something to which the child is not inclined.


Refrain from comparison: Do not compare your child with others or use harsh, judgemental comments that would break their morale and self-belief, which would make them feel like a loser. Instead, appreciate their efforts and performance and help them feel like winners, thereby building up confidence to win innumerable battles of life ahead.


Be positive: Avoid being critical. Offer positive feedback and guide them to focus on excellence and learning rather than just grades. Obsessing over marks can hinder the learning process and harm a child's mental well-being. Instead, reinforce positivity and celebrate the academic milestone they’ve achieved.


Open communication: Engage in open communication, speaking of their strengths, and convey the message that no matter what, your parents stand by them. This will boost their self-esteem, grow, and make them feel trusted, loved, and connected.


Build strong bonds: Parents should often engage in discussions with children regarding their academics, difficulties they face, stress or pressure, if any, and any insecurity they experience physically, emotionally, or psychologically. Make them feel very comfortable opening up with you. This builds a strong bond and makes an effort to blossom with each passing day.


Remember, a percentage is not a true measure of ability or intelligence. Every child is unique, with varying capacities. Some excel academically, while others are creatively gifted, depending on their interests. Judging them solely by marks is unfair.


Academic performance alone does not define personality—it must include qualities like confidence, humility, compassion, and competence. Being a good human being matters just as much as academic success.


Parents must go beyond providing material comforts and focus on shaping their child's life in all aspects. A holistic approach is key to helping an innocent child grow into a well-rounded adult.


Important Guidelines for Children

Once the results are out, take time to process them. Reflect on areas for improvement and plan your next steps.


Avoid comparison: Do not compare your performance with anyone's and focus on your goal, aspirations, and growth. Focus on communication skills, self-awareness, and accountability. This attitude and approach enable you to have a positive mindset and to be a strong individual.


Discus: Have an open and honest discussion with parents and mentors who will guide and help you sail toward growth orientation. Do not rush to decisions. Do not dwell on the past, either good or bad. Move ahead confidently, positively determined.


Practice relaxation: Limit your exposure to gadgets. Watch programmes or read books that have a positive impact, which induces a positive mindset. Exercising, deep breathing, mindfulness, engaging in hobbies, and seeking out new knowledge and skills elevate the mood and sleep pattern, thereby charging brain cells.


Seek help: If you are struggling with pressure or stress and are unable to cope with the process, reach out to your parents immediately for support, which they will surely extend.


Your success is your parents’ dream, selflessly cherished. Honour them with kind gestures of respect, love, and care—you owe them this warmth throughout life. Prove yourself not just academically, but as the son or daughter they raised with love and sacrifice. Never forget their efforts; make them feel valued and present in your life. As you climb the ladder of success, they’ll be your loudest cheerleaders, always praying for your happiness and well-being.


Together, parents and children can embrace and create an atmosphere full of support and positivity. Thus, navigating the process is eased, and the house will be filled with joy and exuberance.


Parents, kindly give wings to your children, and children, remember that when you fly high, it's just not your victory alone. It's the triumph of you and your parents both.


Wishing you good luck in all your future endeavours. Stay blessed always.


(The author is a tutor based in Thane.)

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