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Significant pension hike due to new wage ceiling; ~66% higher pension after 20 years of service; over 51 lakh employees to benefit.
EPF: The Central Government has taken a significant decision regarding employees covered under the Employees' Provident Fund Organisation (EPFO). The wage ceiling under EPF and EPS has been raised from ?15,000 to ?25,000 per month. This change has come into effect from September 17, 2026.
This decision is expected to bring over 51 lakh additional employees under the ambit of the EPFO's social security system. Employees earning between ?15,000 and ?25,000—who were previously outside mandatory coverage—will now be able to avail the benefits of EPF, EPS, and EDLI schemes.
How will the pension increase?
Under EPS, the pension is calculated using the following formula:
Monthly Pension = (Pensionable Salary × Pensionable Service) ÷ 70
Previously, the maximum limit for pensionable salary was ?15,000; it has now been raised to ?25,000. A service bonus of two years is added if the service duration is 20 years or more. Consequently, after 20 years of service, the pensionable service is reckoned as 22 years.
Example:
| Details | Old Limit | New Limit |
| :--- | :--- | :--- |
| Pensionable Salary | ?15,000 | ?25,000 |
| Pensionable Service | 22 years | 22 years |
| Estimated Monthly Pension | ?4,714 | ?7,857 |
| Difference | — | ?3,143 |
In this example, the pension could increase by approximately 66.67%. However, not every employee will necessarily receive this exact pension amount; it depends on factors such as EPS membership, eligible service, actual pensionable salary, and applicable rules. The employer's maximum contribution to the EPS will increase from ?1,250 to ?2,083 per month.
Facility to withdraw PF via UPI
The EPFO ??is conducting trials with banks to enable PF account withdrawals through UPI. This facility is likely to be launched by the end of December 2026. Initially, up to 75% of the eligible amount can be withdrawn via UPI.
This new wage limit could prove significant for the future social security of employees.
EPF: The Central Government has taken a significant decision regarding employees covered under the Employees' Provident Fund Organisation (EPFO). The wage ceiling under EPF and EPS has been raised from ?15,000 to ?25,000 per month. This change has come into effect from September 17, 2026.
This decision is expected to bring over 51 lakh additional employees under the ambit of the EPFO's social security system. Employees earning between ?15,000 and ?25,000—who were previously outside mandatory coverage—will now be able to avail the benefits of EPF, EPS, and EDLI schemes.
How will the pension increase?
Under EPS, the pension is calculated using the following formula:
Monthly Pension = (Pensionable Salary × Pensionable Service) ÷ 70
Previously, the maximum limit for pensionable salary was ?15,000; it has now been raised to ?25,000. A service bonus of two years is added if the service duration is 20 years or more. Consequently, after 20 years of service, the pensionable service is reckoned as 22 years.
Example:
| Details | Old Limit | New Limit |
| :--- | :--- | :--- |
| Pensionable Salary | ?15,000 | ?25,000 |
| Pensionable Service | 22 years | 22 years |
| Estimated Monthly Pension | ?4,714 | ?7,857 |
| Difference | — | ?3,143 |
In this example, the pension could increase by approximately 66.67%. However, not every employee will necessarily receive this exact pension amount; it depends on factors such as EPS membership, eligible service, actual pensionable salary, and applicable rules. The employer's maximum contribution to the EPS will increase from ?1,250 to ?2,083 per month.
Facility to withdraw PF via UPI
The EPFO ??is conducting trials with banks to enable PF account withdrawals through UPI. This facility is likely to be launched by the end of December 2026. Initially, up to 75% of the eligible amount can be withdrawn via UPI.
This new wage limit could prove significant for the future social security of employees.
This decision is expected to bring over 51 lakh additional employees under the ambit of the EPFO's social security system. Employees earning between ?15,000 and ?25,000—who were previously outside mandatory coverage—will now be able to avail the benefits of EPF, EPS, and EDLI schemes.
How will the pension increase?
Under EPS, the pension is calculated using the following formula:
Monthly Pension = (Pensionable Salary × Pensionable Service) ÷ 70
Previously, the maximum limit for pensionable salary was ?15,000; it has now been raised to ?25,000. A service bonus of two years is added if the service duration is 20 years or more. Consequently, after 20 years of service, the pensionable service is reckoned as 22 years.
Example:
| Details | Old Limit | New Limit |
| :--- | :--- | :--- |
| Pensionable Salary | ?15,000 | ?25,000 |
| Pensionable Service | 22 years | 22 years |
| Estimated Monthly Pension | ?4,714 | ?7,857 |
| Difference | — | ?3,143 |
In this example, the pension could increase by approximately 66.67%. However, not every employee will necessarily receive this exact pension amount; it depends on factors such as EPS membership, eligible service, actual pensionable salary, and applicable rules. The employer's maximum contribution to the EPS will increase from ?1,250 to ?2,083 per month.
Facility to withdraw PF via UPI
The EPFO ??is conducting trials with banks to enable PF account withdrawals through UPI. This facility is likely to be launched by the end of December 2026. Initially, up to 75% of the eligible amount can be withdrawn via UPI.
This new wage limit could prove significant for the future social security of employees.
