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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

Predatory Rides

Jun 23, 2025
2 min read

The illusion of safety that Uber has long peddled to its millions of users lies shattered yet again, this time following a shocking incident on a rain-streaked night in Mumbai. A 28-year-old woman, a commercial pilot, hailed an aggregator cab only to find herself entrapped in a rolling assault chamber. The driver rerouted the vehicle, stopped midway and invited two strange men into the car. What followed was an ordeal of physical assault, intimidation and trauma.


That the woman paid her fare of Rs. 530 after being molested is a grim metaphor for how platform capitalism extracts value even from victims. As per her police complaint, she was touched inappropriately, her hand twisted and silenced with threats. She was lucky - if that word can even be used - because the attackers fled when the car slowed before a police checkpoint. This was, by all available evidence, a planned assault facilitated by the very person Uber had entrusted with passenger safety.


The company’s response till now has been deafening silence with proactive reassurance of new safety protocols. The point is how can allegedly ‘vetted’ drivers go rogue in such a calculated way? Uber’s much-touted background checks, GPS tracking, and in-app safety features become meaningless when drivers turn accomplices or plan crimes themselves.


For all its glossy advertising and self-congratulatory metrics, Uber continues to operate in India, and much of the world, as a platform where accountability stops at the terms of service.


This isn’t an isolated incident. Across cities, horror stories have poured in of women forced to leap out of cabs or being stalked after rides. Meanwhile, Uber quietly continues to raise fares, citing fuel costs, regulatory burdens and ‘driver empowerment.’ What it does not raise is the quality of its grievance redressal or the reliability of its safety audits. The few who dare to report crimes face a Kafkaesque wall of automated emails, bot replies and a vacuum of real-world action.


One would imagine that a company with the technological ability to track minute-to-minute ride histories, identify driver detours and geofence every suspicious stop would rush to aid law enforcement. Instead, Uber seems more preoccupied with preserving its ‘trust score’ among investors than ensuring actual passenger trust. It still markets itself as a safe alternative for women travelling alone late at night. Uber’s business model thrives on opacity, allowing the firm to wash its hands of responsibility when things go wrong. Passengers are just ride IDs in a database to be measured by transaction value.


There is a compelling case now for India’s transport regulators to audit Uber’s operations with urgency. Safety violations should no longer be treated as PR hiccups but as criminal lapses. The company must be compelled to submit real-time data on driver behaviour, ensure human-staffed grievance systems and lose its licence for repeat safety breaches. Until then, every woman hailing an Uber at night risks playing Russian roulette with a slick app that masks horrifying risks.

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