Government sources indicated that maintaining the current ₹15,000 wage ceiling is only temporary, with an increase expected down the line

Despite demands from trade unions and experts, the government has retained ₹15,000 per month as the wage ceiling for Employees’ Provident Fund Organisation (EPFO) even under the Code on Social Security 2020 which is mandatory to determine eligibility and contribution caps for social security benefits to workers.

Government sources indicated that maintaining the current ₹15,000 wage ceiling is only temporary, with an increase expected down the line. For now, the threshold remains unchanged to avoid putting more compliance burden on businesses and employers already grappling over the rise of remunerations to employees following implementation of Code of Wages 2019.

The Code’s new standardised definition of “wages” demands that basic pay and dearness allowance (DA) comprise at least 50 per cent of an employee’s total remuneration — a shift scaling up overall wage costs, sources explained.

The Ministry of Labour and Employment issued the notification for retaining this limit which has existed since September 1, 2014, when the government increased it from the earlier cap of ₹6,500 per month.

“In exercise of the powers conferred by clause (89) of section 2 of the Code on Social Security, 2020 (36 of 2020), the Central Government hereby notifies rupees fifteen thousand (₹15,000) per month as the wage ceiling for the purposes of Chapter III of the said Code,” read the notification issued on May 29.

Industry sources also stated that the government may have held onto the old wage ceiling structure for the EPFO because any increase would have impacted the government exchequer already under stress owing to global supply chain disruptions because of the West Asia crisis. 

basic wages

The Central government contributes 1.16 percent of the basic wages up to the statutory ceiling of ₹15,000 toward the Employees’ Pension Scheme (EPS). While the 12 per cent contribution from both parties is calculated on the basic salary plus DA.

The EPFO has over 29 crore active members.

The Supreme Court, hearing a PIL on a long-standing demand from labour unions and others, had asked the Ministry of Labour and Employment in the first week of January to decide on revision of the wage ceiling which remained unchanged for more than eleven years.

The Ministry is of the view to revise and standardise the wage ceilings for both the EPFO and the Employees’ State Insurance Corporation (ESIC).

The ESIC wage ceiling threshold is ₹21,000. It is proposed that both ceilings be revised and capped at a uniform monthly level of ₹25,000 to ₹30,000, businessline had reported earlier.

 Unions and economists have sought an increase in the wage ceiling primarily on the ground that the old threshold does not reflect the changed economic reality of today. It does not address years of inflation that has steadily eroded the purchasing power of employees. Other than that, many states have already increased wage ceilings in their respective jurisdictions.  

Published on May 31, 2026