scorecardresearchMinimum wage for EPFO likely to be raised from ₹15,000 to ₹21,000 per month, report says

Minimum wage for EPFO likely to be raised from 15,000 to 21,000 per month, report says

Updated: 25 Nov 2022, 10:46 AM IST
TL;DR.
The ceiling was last revised in 2014 from 6,500 per month to 15,000 and is applicable only to enterprises that have more than 20 workers
Nearly 7.5 million more workers are expected to come under the ambit of EPFO after the hike in the ceiling.

Nearly 7.5 million more workers are expected to come under the ambit of EPFO after the hike in the ceiling.

The Centre could raise the wage ceiling for the Employees' Provident Fund Organisation's (EPFO) retirement saving scheme. The current ceiling of 15,000 per month is likely to be revised to 21,000 per month, a report by the Economic Times said.

The ceiling was last revised in 2014 from 6,500 per month to 15,000. However, it is applicable only to enterprises that have more than 20 workers.

With the increase in the ceiling, the government is expecting the mandatory contribution to go up for both employees and employers. This will help the employees to save more for their retirement. It will also bring more people under the coverage of EPFO's scheme.

Nearly 7.5 million more workers are expected to come under the ambit of EPFO after the hike in the ceiling. Currently, there are about 68 million workers registered under EPFO.

Moreover, with the new ceiling, the two schemes run by the labour ministry will achieve parity, and it would ease the compliance burden on the establishment.

The ceiling serves two purposes. One, the employees and the employers both have to mandatorily make contributions at 12 per cent on 15,000 maximum wage. Two, the workers in the organised sector who earn 15,000 per month have to become members of the EPF.

The employee can pay a higher towards the fund, but the employer is under no such obligation.

 

First Published: 25 Nov 2022, 10:46 AM IST