EPF Wage Ceiling Hike: In the CBT meeting on November 30, it has been agreed to increase the EPF wage limit but the final decision on this can be taken in the new year 2025.
EPFO Wage Ceiling Hike: The central government is preparing to further strengthen the Social Security Scheme for employees so that they can save more and get more pension on retirement. The Ministry of Labor and Employment can double the minimum wage ceiling under Employee Provident Fund (EPF) and Employee State Insurance Corporation (ESIC) from Rs 15000 to Rs 30000 with the aim of making it mandatory to bring more and more employees under the purview of EPF-ESIC. Due to this decision of the government, about 1 crore new employees will be successful in bringing them under the social security ambit of EPF-ESIC.
Wage limit was increased in 2014
The wage limit for deduction of EPF-ESIC amount from the basic salary of the employees was last increased in 2014. Then the minimum wage limit was increased from Rs. 6500 to Rs. 15000. Now after 10 years, there are preparations to increase it again. By increasing the EPF-ESIC wage limit, more money will be deducted from the salary of the employees for the Provident Fund. Also, the employees will be able to contribute more than their salary to the Provident Fund.
More amount will be deposited in the EPF account
Both the employees and the employer have to contribute to the Employee Provident Fund. It is necessary for the employees to contribute 12 percent of their basic salary in EPF. Employees do not have to make any contribution from their side in EPS. But in EPS i.e. Employee Pension Scheme, the employer has to deposit 8.33% of the 12% amount of basic pay in EPS (Employees Pension Scheme) and 3.67% in the EPF account of the employees. Due to increase in wage limit for EPF, more amount will be deposited in the EPF account of the employees. For example, if the basic salary of an employee is currently Rs 15000, then Rs 1800 is deposited in the EPF account. And if the wage limit increases to Rs 30000, then Rs 3600 will be deposited in the EPF account of those employees whose basic salary is Rs 30000.
More employees will come under the purview of EPF!
The wage limit of EPF-EPS is the limit under which it is legally necessary for the employees to contribute to EPF-ESIC on their behalf. At present, if the basic salary of an employee is more than Rs 15000, then he can choose the option of staying out of EPF. But if the wage limit is increased to Rs 30000, then more people will come under the purview of EPF. At present, 7 crore subscribers are members of EPFO.
Consensus reached in CBT!
This issue has also been discussed in the meeting of the Central Board of Trustees of EPFO held on Saturday 30 November 2024. Members from the Ministry of Labor to the Central Board of Trustees (CBT) are in favor of increasing the wage limit. And it is believed that the final decision on this can be taken in the meeting of the Central Board of Trustees to be held in February in the new year 2025.
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