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...

min read

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

Youth, celebs display ‘josh’

Quaid Najmi

Jul 24

5 min read

Mumbai: Hundreds of students and youth took part in protest marches and demonstrations all over Maharashtra and Mumbai, to express solidarity with the agitation Cockroach Janta Party (CJP) activists in New Delhi for various demands, including the resignation of Union Education Minister Dharmendra Pradhan.

In Mumbai thousands marched before converging at the Shivaji Park in Dadar this afternoon carrying banners, placards, the National Tricolour and some with copies of the Constitution, as part of the CJP’s nationwide call for peaceful protests today.

They were joined later by Shiv Sena (UBT) President and ex-CM Uddhav Thackeray, his son Aaditya, Maharashtra Navnirman Sena leader Amit Thackeray, and many civil society activists like Tushar Gandhi, the great grandson of Mahatma Gandhi, and Anjali Damania among others.

The leaders expressed full support to the agitators in Delhi, Maharashtra and all other states where similar demonstrations were held today in support of the CJP.

Aaditya asked “whether you will support those who rake up Hindu-Muslim to divert attention from burning issues”, and the crowds roared their ‘NO…!’

Amit said that the political parties have become the fans of the youngsters whose voices have reached the power corridors of New Delhi and appealed to them to remain firmly united.

“The enthusiasm of the youth was amazing, the atmosphere was electric and all had assembled with the common objective of safeguarding their future. Even after the stage events ended, the youngsters continued their action in groups and more were seen marching to the venue till late,” Gandhi told ‘The Perfect Voice’ from the site.

Film Personalities

Many film personalities joined the youngsters, expressed their solidarity with the CJP in Delhi and the ongoing nationwide protests over the examination irregularities and demands for greater accountability.

Some of the celebs who attended were actors Atul Kulkarni, Imran Khan, Gurfateh Sing Pirzada, Ayesha Khan, Pratibha Ranta, Dilin Nair, alias ‘Raftaar’, Akasa Singh. Yesteryear actress Shabana Azmi was scheduled to join the protest, but dropped out at the last-minute owing to ill-health, and some others could not reach the venue owing to rains or heavy traffic.

Besides the protest site, many other celebs like Sonu Sood, Preity Zinta, Sonakshi Sinha, Pooja Bhat posted messages online of their support calling for accountability, empathy and peaceful dialogue, while actors Huma Qureshi and Saqib Saleem and others joined the protest today at Jantar Mantar in the national capital.

GenZ swarms in districts

Thousands of students and youth, along with their parents, participated in the CJP-backed nationwide protest call with the slogan of ‘Every District. One Day. One Demand’ in support of the agitation in New Delhi for nearly a month, in different parts of the state.

Besides Mumbai, marches, rallies, demonstrations and slogan shouting were witnessed in Pune, Chhatrapati Sambhajinagar, Nagpur, Solapur, Kolhapur, Jalgaon, Parbhani, Sangli, Latur, Akola, and others. However, in some districts like Thane, Palghar and Nashik, torrential rains derailed similar planned action.

A large number of lawyers, social workers, joined padyatras in Parbhani and Chhatrpati Sambhajinagar on Friday while in Pimpri-Chinchwad, Solapur and Kolhapur, local political parties and NGOs participated in large numbers in the protests.

The Maharashtra Vikas Aghadi (MVA) allies have called for a non-partisan, peaceful protest march from Siddhivinayak Temple to Shivaji Park culminating in a Tricolour rally on Sunday. The organisers have appealed to the masses to participate in large numbers to safeguard the future of the youth and only carry the ‘Tiranga’ as it is a national movement.

Mother of NEET aspirant who ended life addresses gathering in Nagpur

The mother of a NEET aspirant who allegedly committed suicide in May addressed a protest event in Nagpur on Friday and sought the resignation of Prime Minister Narendra Modi and Union Education Minister Dharmendra Pradhan for exam paper leaks and other irregularities.

The protest, in support of the Cockroach Janta Party-led agitation in New Delhi, saw hundreds of youth gathering at Samvidhan Square here.

Speaking at the protest event, Neelam Chaturvedi sought justice for her daughter Akanksha Chaturvedi, who ended her life allegedly due to distress and depression caused by the cancellation of the NEET-UG exam after a paper leak.

"The children who committed suicide cannot be brought back," Neelam Chaturvedi said while seeking compensation for the kin of such students.

She also sought the resignation of Pradhan and PM Modi.

Akanksha, a native of Mauganj district in Madhya Pradesh, was preparing for the NEET at a coaching institute in Nagpur. However, a week after the announcement about cancellation of the May 3 exam, she was found hanging in her room at their home here on May 20, as per police.

Congress takes students battle to villages

Lending a political hand to the protesting youth in the country, the Congress today announced a statewide agitation with candle marches and satyagrahas reaching every district and villages on Saturday.

Claiming that 152 examination papers had leaked in different parts of the country in the past decade, state Congress chief Harshwardhan Sapkal accused the BJP governments of failing to plug the systemic loopholes or heed the genuine concerns of lakhs of students worried about their future.

“We shall mobilise public support for the protesting students on the examination glitches, the high-handed crackdown on the youngsters demonstrating peacefully. Instead of safeguarding the students’ future, the government is protecting the Union Education Minister Dharmendra Pradhan,” Sapkal said.

Reiterating the party’s main demands listed out by Congress Leader of Opposition in Lok Sabha Rahul Gandhi yesterday, Sapkal slammed the Maharashtra government for excessive force on the students in Mumbai, threats to frame them in fake drug cases and outraging the modesty of even a woman protester.

“This ‘police raj’ is a blot on Maharashtra. The CM Devendra Fadnavis calls himself a ‘Devabhau’, but he behaves more like ‘Duryodhana’. The social activist Anna Hazare has finally found his voice, but the CM keeps mum,” said Sapkal in a swipe.

Chants of Azadi and Vande Mataram

During the 'Tiranga Morcha', organised by the Uddhav Thackeray-led party at the Shivaji Park, its leader Aaditya Thackeray said he called Cockroach Janta Party (CJP) founder Abhijeet Dipke, urging him not to return home in Maharashtra until Dharmendra Pradhan steps down from his position.

Speaking at the gathering, Uddhav Thackeray said while the government has the power of 'lathis', the protesters have 'tirangas' (tricolours) in their hands.

At Shivaji Park, the participants raised slogans of "Azaadi (freedom) from dictatorship and paper leaks" with 'Vande Mataram' being played in the background. Some of the protesters carried the posters of freedom fighter Bhagat Singh and chief architect of the Constitution Dr Babasaheb Ambedkar.

Uddhav Thackeray said those in power should see the number of people who have turned up for the protest.

"This is 'jan ki baat' (voice of people) and Delhi has to listen to it. The way students were attacked, tear-gassed, I am cautioning the government - you can have lathis, but we have tirangas. Let's see who wins - those with tirangas or lathis," the former Maharashtra chief minister said.

Aaditya said although activist and education reformer Sonam Wangchuk has ended its indefinite hunger strike, the protest will continue.

"Dharmendra Pradhan must resign," he said.

He urged the youth to freely hold protests at the Shivaji Park irrespective of the police detaining several protesters days ago.

Targeting Prime Minister Narendra Modi, the Sena (UBT) MLA said whenever the PM gets scared, he talks about Hindu-Muslims and religion.

Maharashtra Navnirman Sena (MNS) leader Amit Thackeray, son of party leader Raj Thackeray, said the government was on the backfoot due to the GenZ protests.