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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

BJP apprehensive of Marathi-Muslim vote bloc

Writer: Abhijit Mulye
Abhijit Mulye
Dec 24, 2025
3 min read

Mumbai: The strategic reunion of the Thackeray cousins marks a pivotal shift in Mumbai’s political landscape, forcing the BJP-led Mahayuti to reconsider its path toward controlling the Brihanmumbai Municipal Corporation (BMC). At the heart of the BJP’s concern is the emergence of a Marathi-Muslim voting bloc, a demographic alliance that mirrors the potent ‘Muslim-Yadav’ formula famously utilised by Lalu Prasad Yadav in Bihar. Internal assessments suggest that this cross-community alignment could influence as many as 43 seats in the city. While the BJP traditionally struggles to capture the Muslim vote, the real danger to their campaign lies in the possibility of the Muslim community voting tactically for the Shiv Sena (UBT) to prevent a BJP victory.


The formalisation of the alliance between Uddhav Thackeray and Raj Thackeray has fundamentally altered the math in 36 core ‘Marathi’ seats. Previously, the BJP had hoped that a split in the Marathi vote between various factions would allow their candidates to sail through. However, the unified ‘Brand Thackeray’ appeal now threatens to consolidate these votes under a single banner.


Sigh Of Relief

Interestingly, BJP surveys had previously indicated that if Raj Thackeray had joined Eknath Shinde’s faction, the impact would have been even more severe, potentially affecting 45 seats. While the current UBT-MNS pairing offers a slight ‘sigh of relief’ in that regard, it remains a formidable obstacle to the Mahayuti’s target of 178 seats.


Further complicating the situation is the stance of the City Congress unit, which recently severed ties with the Shiv Sena (UBT). This move was largely driven by the fear that their core Muslim support base would be alienated by an association with the MNS. The BJP’s strategy has involved highlighting this tension. City BJP Chief Ameet Satam famously warned that a UBT victory would result in the city having a ‘Khan’ as its Mayor. This was a clear attempt to polarize the electorate and pull Marathi voters away from the Thackeray camp.


Marathi Mayor

However, Raj Thackeray’s assurance at today’s press conference that the city will have a ‘Marathi Mayor’ from the UBT-MNS alliance has provided a counter-narrative. This statement serves two purposes. Firstly, it reassures the Marathi heartland of the alliance’s priorities, and secondly it gives the BJP a new rhetorical tool. The BJP now intends to use Raj Thackeray’s ‘Marathi-first’ rhetoric to suggest to Muslim voters that the alliance does not truly represent their interests, hoping this will cause them to reconsider their tactical support for the Shiv Sena (UBT).


As the January 15 elections approach, the success of the Mahayuti depends on whether they can break this budding Marathi-Muslim coalition or if the “Thackeray Factor” will successfully bridge the gap between these historically disparate voting blocs.


Seat Sharing

A senior BJP leader, while commenting on the UBT-MNS alliance asked as to why the seat-sharing formula was not declared by the two leaders, and went on to reveal the answer. According to him, the Shiv Sena (UBT) is worried as to how many seats the Shiv Sena under Eknath Shinde gets to contest and knows well that Shinde won’t settle for anything less than what the MNS gets. The BJP leader said that the MNS is asking for 80 seats and if that number is revealed, the BJP will have to leave as many seats to Shiv Sena. It’ll be better for the BJP.


Their track record is of corruption and self-interest. Their alliance is for their own political survival and it will not make any significant political difference. It is childish if anyone thinks otherwise. People will not get swayed. The television news channels were reporting as if it was the Russia-Ukaine alliance. Thackerays are not the lone representatives of Marathi people and Mumbai.

Devendra Fadnavis, Chief Minister

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