The Employees’ Provident Fund Organisation (EPFO) has clarified the eligibility rules for the Employees’ Pension Scheme (EPS) after the monthly wage limit for mandatory provident fund coverage was increased to Rs 25,000 from Rs 15,000.
In a post on X, explained how an employee’s monthly wages and previous membership of the pension scheme affect eligibility. The clarification is important for employees who want to know whether they should be covered under EPS and whether pension contributions should be deducted.
The revised wage ceiling, effective September 17, 2026, is earning between Rs 15,000 and Rs 25,000 per month under mandatory EPFO coverage.
According to EPFO’s post, employees earning monthly wages of Rs 25,000 or less can be covered under EPS, subject to the scheme’s eligibility conditions.
The graphic shared by EPFO explains that pension membership is mandatory for eligible employees earning up to the revised wage ceiling. The applicable contributions must be made in accordance with the rules.
However, employees earning more than Rs 25,000 per month who were not EPS members previously are not eligible for fresh membership, as explained in the graphic.
This means that the revised wage ceiling does not automatically make every employee eligible for pension benefits. An employee’s previous membership and the applicable EPS rules also play an important role.
The Ministry of Labour and Employment has increased the monthly wage ceiling for mandatory EPFO coverage from Rs 15,000 to Rs 25,000, effective September 17, 2026.
According to the details provided in the ministry’s circular, the change is expected to bring more than 51 lakh additional formal-sector workers earning between Rs 15,000 and Rs 25,000 per month under mandatory coverage.
Eligible employees will receive social security benefits under three schemes: the Employees’ Provident Fund (EPF), the Employees’ Pension Scheme (EPS) and the Employees’ Deposit Linked Insurance (EDLI) scheme.
EPF helps employees build retirement savings through contributions from employees and employers. EPS provides pension benefits to eligible members, while EDLI provides life insurance benefits to eligible employees.
The increase in the wage ceiling is intended to extend social security coverage to more workers who were outside mandatory coverage because their wages exceeded the earlier limit.
The increase in the pensionable wage ceiling also raises the maximum monthly employer contribution towards EPS.
At the applicable rate of 8.33%, the maximum monthly employer pension contribution will rise from Rs 1,250 to around Rs 2,083, based on the increase in the pensionable wage ceiling from Rs 15,000 to Rs 25,000.
However, this does not mean every employee earning up to Rs 25,000 will automatically receive an EPS contribution of Rs 2,083 every month. The actual contribution depends on eligibility, pensionable wages and the applicable scheme rules.
It is also important to understand that the employer’s contribution towards EPS is part of the employer’s overall provident fund contribution. It is not an additional deduction from the employee’s salary.
EPFO has advised employees to contact their employer first if they believe the applicable contribution has not been deducted.
If the employer does not take action, employees can raise a complaint through the EPFiGMS portal, EPFO’s online grievance redressal system.
Employees should keep their salary details and relevant employment records handy while raising a complaint. This can help them explain the issue and support their claim.
Simply put, employees should check their eligibility and previous membership status before assuming that they qualify for pension benefits.