EPF hike: What workers gain, what Centre pays

The government has decided to increase the Provident Fund (EPF) wage ceiling from Rs 15,000 to Rs 25,000, which is expected to bring over 51 lakh additional employees under mandatory social security coverage. This move will increase the Centre's estimated annual expenditure under the framework by around Rs 1,089 crore, taking it to Rs 11,339 crore annually. Over five years, the expenditure is projected to reach approximately Rs 56,696 crore.

Employees earning between the previous Rs 15,000 and the new Rs 25,000 a month will now be eligible for provident fund savings, pension benefits, and insurance protection through the Employees' Deposit Linked Insurance Scheme. This expansion in social security coverage aims to provide greater stability to employees and assist employers in retaining their workforce.

However, the revision may also affect the take-home salaries of some employees, as higher mandatory PF contributions will result in a greater portion of wages being directed towards provident fund savings. Employers may face increased costs, particularly for workers whose contributions are currently limited to the Rs 15,000 ceiling. The precise impact on individual employees and employers will depend on the implementation provisions, which are still awaited in the form of a formal notification.