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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

Seamless link to redefine Mumbai-Pune mobility

Writer: Bhalchandra Chorghade
Bhalchandra Chorghade
Apr 21
3 min read

MMRDA advances Atal Setu connector

Mumbai: The Mumbai Metropolitan Region Development Authority (MMRDA) is advancing a critical infrastructure link that promises to fundamentally transform connectivity between Mumbai and Pune. The under-construction corridor connecting the Atal Setu with the Mumbai–Pune Expressway is emerging as a strategic intervention aimed at eliminating long-standing inefficiencies in regional travel and logistics.


While construction progress has been steady, the larger importance of the 7.35-kilometre, six-lane elevated corridor lies in its ability to create a seamless, signal-free route between two of Maharashtra’s most vital economic centres. At present, commuters and freight traffic exiting Atal Setu must navigate circuitous and often congested routes to access the expressway. The new connector, routed via Chirle and Palaspe, will remove this bottleneck, enabling uninterrupted high-speed travel across the Mumbai Metropolitan Region (MMR).


Urban planners view this project as more than a routine road development. By directly integrating the trans-harbour link with the expressway network, the corridor effectively stitches together key transport infrastructure, creating a unified mobility spine. This is expected to significantly reduce travel time variability—one of the most persistent challenges for both daily commuters and commercial transport operators.


The implications extend beyond mobility. The connector is poised to accelerate the de-centralisation of economic activity away from Mumbai’s saturated island city. Faster access to Navi Mumbai and peripheral growth centres is likely to make these regions more attractive for residential, commercial and industrial development. In turn, this could ease pressure on core urban areas while promoting more balanced regional growth under the broader “Mumbai 3.0” framework.


A major strategic advantage of the project is its integration with the upcoming Navi Mumbai International Airport. Once operational, the corridor will provide direct and efficient access from Mumbai to the airport, while also strengthening onward connectivity to Pune. This is expected to expand the airport’s effective catchment area and improve its competitiveness as a major aviation hub. For industries reliant on time-sensitive logistics, such connectivity could prove particularly valuable.


Economic Centres

The corridor also has the potential to reshape the relationship between Mumbai and Pune as economic centres. With reduced travel times and improved reliability, intercity commuting could become increasingly viable, allowing professionals to live in one city and work in another. This increased fluidity is likely to deepen economic linkages, enhance labour mobility, and support the emergence of a more integrated regional economy.


Speaking on the project’s significance, Metropolitan Commissioner Dr. Sanjay Mukherjee emphasised its role in simplifying everyday travel. “This connector will enable Mumbaikars to access the Mumbai–Pune Expressway without any signal interruptions, creating a faster and more seamless travel corridor through Atal Setu,” said Mukherjee. “It will significantly benefit students, working professionals and those commuting between Mumbai and Pune—making it easier to live in one city and work or study in the other.”


He added that the project aligns with MMRDA’s long-term vision of integrated infrastructure planning. “This is exactly what Mumbai 3.0 and ‘Mumbai in Minutes’ aim to achieve—bringing regions closer and making everyday journeys simpler, quicker, and more efficient,” Mukherjee said.


Scheduled for completion by early 2027, the connector is expected to deliver benefits that extend well beyond its physical footprint. By addressing a critical missing link in the region’s transport network, it underscores a broader shift toward strategic, network-driven infrastructure development—where the focus is not merely on building new assets, but on maximising their collective impact.

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