EPFO explains EPS eligibility after ₹25,000 wage hike: Check which employees get pension coverage — and who don't

The monthly wage limit for mandatory Employees’ Provident Fund Organisation (EPFO) coverage was increased from ₹15,000 to ₹25,000, effective 17 September 2026.

According to the Ministry of Labour & Employment, the change is expected to extend statutory social security benefits to more than 51 lakh additional employees, particularly those earning between ₹15,000 and ₹25,000 a month who were previously outside mandatory coverage.

EPF and EPS are two distinct components of the retirement benefits framework. Now, EPFO has posted on X explaining the eligibility criteria for the Employees’ Pension Scheme (EPS).

According to EPFO’s post, “If your monthly salary is ₹25,000 or less, EPS membership is mandatory as per eligibility. If your monthly salary is more than ₹25,000, EPS membership is not mandatory.”

The post highlights how monthly wages and an employee’s previous EPS membership determine eligibility, as well as when contributions towards the pension scheme are required or may not be deducted.

EPFO outlined two key conditions for determining EPS membership eligibility.

• If wages are ₹25,000 or less, EPS (Pension) membership is mandatory, and contributions shall be deducted.
• If wages are more than ₹25,000 and you were not an EPS member previously, you are not eligible for EPS membership, and contributions shall not be deducted.

This distinction means that salary alone does not determine eligibility in every case. An employee’s previous membership of EPS is also relevant when assessing whether they can become a member of the scheme.

The Employees’ Provident Fund (EPF) and EPS are two components of the broader retirement savings framework. While EPF helps employees accumulate retirement savings, EPS provides pension benefits to eligible members.

Under the standard contribution structure, the employer contributes 12% of eligible wages towards EPF-related contributions. Of this amount, 8.33% of pensionable wages is allocated to EPS, subject to the applicable wage ceiling and scheme provisions. The balance is credited towards EPF.

For instance, if the applicable pensionable wage is ₹25,000 per month, the employer’s 12% contribution amounts to ₹3,000. The EPS allocation at 8.33% works out to ₹2,082.50, while the remaining ₹917.50 goes towards EPF.

However, these calculations illustrate the contribution split at the stated wage level. The actual allocation depends on the employee’s eligibility and the applicable EPF and EPS rules.

EPFO has advised employees to contact their employer first if EPS contributions are not deducted when wages are ₹25,000 or less, or are deducted despite their ineligibility for membership.

Employees should verify their membership history and applicable eligibility conditions before concluding that a contribution has been incorrectly withheld.

If the issue remains unresolved, employees can raise a grievance through the EPF i-Grievance Management System (EPFiGMS) portal.

Sheetal Goel is a Content Producer at Livemint, where she covers corporate developments, personal finance, business trends, markets, and SEBI-related updates. She focuses on simplifying complex financial concepts and presenting them in a clear, reader-friendly manner, thereby helping audiences better understand investment trends, personal finance, and market developments. Her writing focuses on making finance more accessible to everyday readers while maintaining clarity, accuracy, and relevance. <br><br> She holds a degree in Economics (Hons.) along with an MBA in Finance, which has helped her develop a strong foundation in financial analysis, market understanding, and business reporting. Before joining journalism, she worked with finance and broking firms, where she closely followed market developments, investment strategies, and evolving industry trends. This practical exposure strengthened her understanding of financial markets. She has also written content across multiple formats and platforms, including YouTube, LinkedIn, and Instagram. <br><br> Over time, she has developed expertise in covering market-linked stories, investor-focused topics, and regulatory updates in a simplified yet informative style. She also enjoys reading and listening to Hindi poetry, reflecting her appreciation for literature and creative expression beyond the world of markets and numbers.

Get Latest real-time updates

Catch all the Instant Personal Loan, Business Loan, Business News, Money news, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

HomeMoneyPersonal FinanceEPFO explains EPS eligibility after ₹25,000 wage hike: Check which employees get pension coverage — and who don't

✕

Wait for it…

Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.