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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

The Everyday Choices Powering Mumbai’s Climate Future

Writer: Reeva Sakaria
Reeva Sakaria
May 25
3 min read

Pause for a moment and ask yourself: how did you get to work today and what might that choice have meant for the planet?


When we talk about climate change, the conversation often drifts to big-picture ideas, rising temperatures, emission targets, long-term commitments.


But in my experience working in urban mobility, the impact feels much closer to home. It shows up in the smallest, most routine decisions, how we move through our city every day, often without even thinking about it.


In Mumbai, these everyday decisions play out at an extraordinary scale. Over 8 million train journeys daily, thousands of buses, and a growing metro network keep the city in motion. Public transport is not adoption here, it’s what keeps the city running. And yet, private vehicle usage continues to rise. From what I have seen, this often comes down to uncertainty, those small moments of doubt around timing, reliability, or ease. And over time, that uncertainty adds up to a real environmental cost.


India’s urban transport sector contributes nearly 12 per cent of total CO₂ emissions, with cities like Mumbai at the centre of it. The city’s AQI regularly sits between 120-180, and commuters spend close to an hour each day in traffic. You can feel what that means-more vehicles on the road, more time spent idling, and air quality that steadily worsens.


At the same time, even small shifts can make a noticeable difference. A single Mumbai local train can take around 1,000 cars off the road. A 1–2 per cent shift from private vehicles to public transport during peak hours can remove tens of thousands of vehicles from city streets. Over time, this translates into less congestion, lower emissions, and a city that feels a little less strained, a little easier to breathe in.


But for most people, the decision is not about systems, it’s about experience. People naturally gravitate towards what feels reliable and easy. When public transport feels uncertain or difficult to navigate unclear timings, last-minute platform changes, lack of real-time updates, commuters look for alternatives that give them more control. And when that happens at scale, the impact shows up across the city.


This is the space we’ve been focused on at Yatri. As the Official Mumbai Local Train App, we see our role as making existing infrastructure work better for people. Real-time train tracking, live updates platform information, and integrated metro ticketing are all small pieces of a larger goal, bringing more clarity and confidence into the daily commute. Over time, that clarity changes how people feel about public transport. It starts to become a more natural, dependable choice.


Today, Yatri is helping reduce approximately 30 metric tonnes of CO₂ emissions every day, adding up to nearly 10,950 metric tonnes annually, equivalent to the carbon absorption of close to 5 lakh trees. What stands out is how this impact is built through millions of small, everyday decisions that become easier with better information.


There’s also a ripple effect. When people can plan their journeys better, they spend less time in traffic, saving 10-20 minutes a day on average. Across a city, that adds up to millions of hours saved each year, along with lower fuel consumption and fewer idle emissions. It also makes daily life a little easier.


Sustainability, in this sense, starts to feel less like a trade-off and more like a natural outcome of efficiency.


There’s something important to acknowledge here, Mumbai is already doing a lot right. Millions of people step out every day and choose public transport, contributing to a city that moves efficiently despite its scale. With a bit more support, clearer information, smoother experiences, better integration, that everyday choice can become even easier and more consistent.


That’s where technology can make a meaningful difference. By adding real-time information and reducing uncertainty, it helps people make better decisions without having to think too hard about them.


And when those decisions are repeated across millions of commuters, the impact becomes significant. There’s also an opportunity to make that impact more visible. Imagine being able to see how much carbon you’ve saved over time simply by choosing public transport. Most people aren’t thinking about emissions when they commute, they’re thinking about reaching on time, saving money, avoiding stress. But those everyday choices quietly add up, and making that visible can change how we relate to them. At Yatri, we’re working towards bringing this visibility into the daily commute.


Where this goes next depends on how we move as a city. The effects of our choices show up in the air we breathe, the time we spend, and the way our cities function.


Eventually, the way we move is gradually shaping the cities we live in.


So, how will you choose to get to work tomorrow?


(The writer is a co-founder of Yatri. Views personal.)

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