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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

Pawars are losing the Pune plot

Dec 28, 2025
3 min read

Municipal elections expose the identity crisis within both factions of the Nationalist Congress Party

Pune: Local elections are often treated as administrative skirmishes. But in Pune, they have become something akin to a philosophical debate about loyalty and legitimacy, ideology and expediency, and whether political parties can survive repeated acts of self-contradiction. The week-long turmoil surrounding the city’s municipal polls has laid bare the Nationalist Congress Party’s deepest malaise: a party split not merely by factions, but by incompatible ideas of what it stands for.


At the heart of the drama lie the two NCPs led respectively by Sharad Pawar, the patriarch who once gave the party its ideological spine, and the other by his nephew Ajit Pawar, now Deputy Chief Minister in the BJP-led Mahayuti. When the election schedule was announced, many that each faction would fight separately, and the Bharatiya Janata Party would keep its distance.


Instead, the BJP made clear it would not ally with Ajit Pawar’s NCP faction for the Pune civic polls. That refusal set off a chain reaction. A section within Sharad Pawar’s faction began exploring a local alliance with Ajit Pawar’s group, arguing insistently that municipal elections were about pragmatism and not ideological purity. The proposed move has startled even seasoned observers. More surprising still was the apparent openness of Supriya Sule, Sharad Pawar’s daughter and the party’s most prominent national face, to facilitating talks between the two sides.


What followed was not just a tactical disagreement but a revolt of principle. Prashant Jagtap, the NCP’s Pune city president, publicly challenged the idea of any alliance with Ajit Pawar’s faction. His reasoning was that he had fought both the Lok Sabha and Assembly elections on an explicit anti-BJP plank. To now partner with a group that formed part of the BJP government, he argued, would amount to a betrayal of voters.


Talking Point

Jagtap’s defiance quickly became a state-wide talking point. At 47, a former mayor and a policy-minded local leader with a reputation for mastering civic minutiae, he was hardly an insurgent outsider. Yet by questioning Sharad Pawar’s tactical instincts while remaining within the party, he punctured the aura of unquestioned authority that has long surrounded the Pawar name. Even more awkwardly, BJP leaders maintained an almost studied silence as one of their allies flirted with Sharad Pawar’s camp, highlighting the convenience that define coalition politics in Maharashtra.


Supriya Sule attempted damage control, stepping in to mollify Jagtap and to still the speculation about a grand NCP reunion, however temporary. It did not work as Jagtap refused to retreat and soon took a more decisive step by crossing over to the Congress.


His exit was an indictment on the nature of the breathtaking contortions that have come to define to Maharashtra’s politics in recent times. In Pune, many saw it as the migration of credibility from a party mired in equivocation to one desperate for organisational revival. Congress leaders privately admitted that Jagtap’s arrival was a windfall: a grounded urban politician with local appeal at a time when the party struggles to find both. For residents weary of endless factional manoeuvres, his stand seemed refreshingly legible.


Meanwhile, the much-discussed talks between the two NCP factions quietly collapsed. By Saturday evening, it was clear that the Sharadchandra Pawar-led NCP would contest the municipal elections as part of the Maha Vikas Aghadi, alongside Congress and the Shiv Sena (UBT). The attempted rapprochement had yielded only confusion, bruised authority and one prominent defection.


The episode has also cast a shadow over the BJP. In Pune, whispers are growing that dynastic considerations may dominate its candidate selection, potentially provoking internal dissent. The party’s aggressive induction of new entrants, often from rival camps, has generated unease among long-time workers who fear being sidelined.


For the NCP, however, the implications are more existential. Once conceived as a party that blended Maratha pragmatism with a secular, reformist outlook, it now risks becoming a vessel defined solely by surnames and split loyalties. The Pune episode suggests that local leaders and voters alike are increasingly impatient with ambiguity masquerading as strategy.


Municipal elections rarely rewrite political history. But they do reveal fault lines. In Pune, they have exposed a party struggling to reconcile legacy with coherence and a city electorate alert to the difference. 

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