Govt considers raising EPFO, ESIC wage ceiling to ₹30,000

The Ministry of Labour and Employment is examining a proposal to revise and standardise the wage ceilings for EPFO and ESIC following a recent Supreme Court directive and long-standing demands from labour unions
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KAMAL NARANG

Following a recent directive from the Supreme Court of India and a long-standing demand from labour unions, the Ministry of Labour and Employment is actively examining a proposal to revise and standardise the wage ceilings for both the Employees’ Provident Fund Organisation (EPFO) and the Employees’ State Insurance Corporation (ESIC).

At present, the EPFO wage ceiling stands at ₹15,000 per month, while the ESIC threshold is ₹21,000. It is proposed that both ceilings be revised and capped at a uniform monthly level of ₹25,000 to ₹30,000, sources familiar with the matter said.

Coverage impact

The move will align social security thresholds with today’s wage realities, correcting the erosion caused by inflation and rising minimum wages after more than a decade. By standardising the ceiling for both schemes, it removes a long-standing anomaly that excluded a large segment of salaried workers from full social security coverage.

Member base

EPFO currently has around 8.5 crore contributing members, while ESIC covers 3.25 crore insured persons. In the case of ESIC, family members are also covered, taking the total number of beneficiaries to about 14 crore.

Contribution rules

The wage ceiling represents the maximum monthly salary on which contributions towards the Provident Fund, the Employees’ Pension Scheme (EPS) and the Employees’ Deposit Linked Insurance (EDLI) are calculated. For employees earning above ₹15,000 per month, participation in EPFO is voluntary.

The wage ceiling was last revised in 2014. At present, both employees and employers contribute 12 per cent each of the employee’s basic salary and dearness allowance to EPFO.

Of the employer’s contribution, 8.33 per cent is routed to the Employees’ Pension Scheme, while the remaining 3.67 per cent is credited to the provident fund account.

Apex court push

Last week, the Supreme Court directed the Centre to take a decision within 4 months on the long-pending demand to raise the EPFO wage ceiling, citing substantial wage growth and inflation. Petitioners argued that the existing ceiling is arbitrary and divorced from economic reality, as it does not account for inflation, minimum wages, or growth in per capita income. They also relied on parliamentary committee reports and expert opinions to press the case for an upward revision.

The move will have wide implications for employees’ retirement benefits and, at the same time, increase the number of beneficiaries for both schemes.

In comparison, the ESIC wage ceiling for employee coverage was increased from ₹15,000 to ₹21,000 per month in 2017. A higher limit of ₹25,000 per month applies to Persons with Disabilities (PwDs) in factories and establishments employing 10 or more workers.

Unlike EPFO, coverage under ESIC is mandatory and not voluntary.

Published on January 12, 2026