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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

Muslims get that ‘sinking feeling, again’

Dec 25, 2025
3 min read

Mumbai: Soon after sworn political adversaries Uddhav Thackeray of the Shiv Sena (UBT) and Maharashtra Navnirman Sena (MNS) chief Raj Thackeray publicly embraced reconciliation, a familiar sense of unease spread among Maharashtra’s Muslims and other minorities.


For many, the reunion of the cousins after 20 years of separation was less about Marathi unity and more about political expediency, plus a grim reminder of how minority expectations remain expedient for self-serving politicians or parties all over.


Admittedly, sections of Muslims had begun to accept Uddhav Thackeray during his tenure as the Maharashtra Vikas Aghadi (MVA) Chief Minister, but are now a tad unsettled by the sudden political realignment.


Uddhav’s mild and all-inclusive governance as a ‘father figure’, perceived outreach and resistance to overt communal rhetoric had earned him cautious goodwill during the Covid-19 Pandemic days, but the rapprochement with Raj Thackeray - whose political style abhors many - raise fresh doubts.


Let Down

Of Maharashtra’s estimated 1.75 crore Muslims, a few voices sounded helpless more than outraged, with many feeling ‘let down’ and their expectations from a perceived ‘Messiah’ again dashed owing to political compulsions.


Marathi Muslim Seva Sangh (MMSS) President Faquir M. Thakur summed up the mood candidly. “We have not adopted any official stand yet. But there is no question of extending blanket support to any party. We are likely to remain neutral,” he said.


Thakur spoke wistfully of a deeper realisation within the community - that when Muslims and minorities face crises, meaningful political support is often lacking from those they trusted. This has led to more pragmatic voting decisions, influenced by candidates or parties committed to take principled positions on issues directly affecting the community.


On the concerns of increased social polarisation, Thakur said: “Society has become sharply divided along caste-communal lines. Yet many now feel that if the BJP were to abandon its hardline anti-Muslim posture, nobody will mind if it rules for a hundred years.”


Ideological Distortions 

Maulana Mohammad Burhanuddin Qasmi, Director of Markazul Ma’arif Education Research Centre, said that ideological commitment has virtually vanished from Indian politics. “Most parties and leaders today are neither genuinely Right nor Left. They are mere opportunists driven purely by self-interest,” he said.

 

In this context, he said that the MNS is no exception. After 2014, ideological distortions have only deepened, with frequent party-hopping becoming normalised, especially among smaller parties and their leaders.


Survival Tactic

Social activist Feroze Mithiborwala feels that Uddhav Thackeray had little choice but to align with Raj Thackeray to ensure consolidation of the Marathi votes, especially in Mumbai.


“The rival Shiv Sena (Eknath Shinde) is growing stronger, armed with money and institutional power, which poses a direct existential threat to the SS (UBT). So, the tie-up (with MNS) is a survival tactic,” he explained.


Expectedly, the new alliance rattled the Congress - given Raj Thackeray’s perceived hostility towards North Indians and Gujaratis - and it decided to go solo in Mumbai given its own unique support base, said Mithiborwala.


Power Politics 

Tasneem Shaikh, a retired private-sector executive, was more blunt. She described the development as “ruthless power politics” devoid of ideological sincerity. “All parties, especially those in power, are obsessed with winning seats and controlling institutions - for advantage and survival,” she said.


Questioning their power-centric intentions, Shaikh asked: “Who is genuinely addressing inflation, unemployment, education, law and order, or public amenities? These issues affect everyone, including minorities, yet they rarely dominate political discourse.”


Citing the 2024 Lok Sabha and Assembly elections, Thakur claimed that Muslims were again reduced to a vote-bank by parties across the spectrum, and “after securing our votes, those parties dwelt on their own selfish agendas, not the national interest”.


Maulana Qasmi predicts that the hand-shake between Thackeray cousins will primarily serve their mutual political interests, and Muslims are unlikely to view this alliance any differently when they exercise their franchise next month.


Though SS(UBT) banks heavily on the traditional Marathi support, it has also cultivated a growing minority voter base, but ultimately voters may select local candidates ready to champion minority concerns over political alliances, pointed out Mithiborwala.


In such a discouraging scenario, Shaikh feels minorities may be swayed only by candidates with integrity, accessibility, and a record of serving people without discrimination will matter more than party labels.


For a large chunk of Muslims, the Thackeray cousins’ reunion has rekindled that dreaded ‘sinking feeling’ with alliances shifting in the political quicksand - while the desperate minorities keep their fingers crossed for a helping hand.

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