BENGALURU: The increase in the statutory wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) from Rs 15,000 to Rs 25,000 per month is expected to bring more employees under the coverage of Provident Fund benefits, while increasing the amount contributed towards employees’ retirement savings.
Explaining the implications for employees, Aniket Anil Ambekar, Regional PF Commissioner-II, RO, Bengaluru (Malleswaram), stressed, “Employees should also understand that an increase in PF contribution shall result in a corresponding positive impact on overall finances of the employee, because such deduction towards EPF shall immediately yield addition of matching contribution of employer in his own PF account, which in turn earns one of the best interest (8.25% per annum in FY25-26, compounded at monthly running balance), tax-free savings, monthly pension and premium-free insurance.
Ensuing benefits definitely outweigh such enhanced deduction,” he said. Ambekar said the additional contribution should be seen as a shift in how employees save, rather than simply as a reduction in monthly take-home pay.
“Any increase in employee share of EPF due to increase in wage ceiling is correspondingly matched by the employer and builds towards guaranteed pension and free insurance coverage: a small trade-off for lifelong security. It may be thought of as moving from ‘take home pocket’ to ‘PF account pocket’ of the employee. It is the same as having money in your bank account,” he emphasised.