EPFO Wage Ceiling Hike: The Central Government is preparing to further strengthen the Social Security Scheme for the employees so that they can save more and get more pension on retirement. Ministry of Labor and Employment is doubling the Minimum Wage Ceiling under Employee Provident Fund (EPF) and Employee State Insurance Corporation (ESIC) with the aim of making it mandatory to bring more and more employees under the ambit of EPF-ESIC. It can be increased from Rs 15000 to Rs 30000. Due to this decision of the government, there will be success in bringing about 1 crore new employees under the social security ambit of EPF-ESIC.
Wage limit was increased in 2014
The wage limit for deduction of EPF-ESIC item from the basic salary of employees was last increased in 2014. Then the minimum wage limit was increased from Rs 6500 to Rs 15000. Now there are preparations to increase it again after 10 years. By increasing the EPF-ESIC wage limit, more money will be deducted from the salaries of employees for the provident fund. Also, employees will be able to contribute more than their salary to the provident fund.
More amount will be deposited in EPF account
Both employees and employers have to contribute to the Employee Provident Fund. Employees are required to contribute 12 percent of their basic salary in EPF. Employees do not have to make any contribution on their own in EPS. But in EPS i.e. Employee Pension Scheme, out of 12 percent of the basic pay, the employer has to deposit 8.33 percent in the EPS (Employees Pension Scheme) and 3.67 percent 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 30,000, then Rs 3,600 will be deposited in the EPF account of those employees whose basic salary is Rs 30,000.
More employees will come under the ambit of EPF!
The wage limit of EPF-EPS is the limit under which employees are legally required to contribute to EPF-ESIC on their own behalf. At present, if the basic salary of an employee is more than Rs 15000, then he can choose the option to stay out of EPF. But if the wage limit is increased to Rs 30,000, more people will come under the ambit of EPF. At present 7 crore subscribers are members of EPFO.
Consensus reached in CBT!
This issue was also discussed in the meeting of the Central Board of Trustees of EPFO on Saturday, November 30, 2024. From the Labor Ministry to the Central Board of Trustees (CBT) members 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 the month of February in the new year 2025.
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