Tuesday, February 7, 2023

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EPFO Salary limit Increase: Now employees to get more than Rs20,000 per month; check out details

EPFO Salary limit Increase: The government may revise the salary limit for the Employees’ Provident Fund Organization’s primary retirement savings programme (EPFO). The Employees’ Provident Fund (EPF) plan now has a monthly wage maximum of Rs 15,000. According to the report of The Economic Times, a committee would be formed to decide on the higher wage cap.

Employers and employees will both have to contribute more if the salary cap is raised. The government provides 1.16 percent of each employee’s basic income to the Employees’ Pension Scheme, and the employer matches these contributions with a contribution equivalent to 12% of each employee’s basic salary. The beneficiary’s pension account receives 8.33 percent of the employer’s 12% contribution.

Raised amount limit

According to media reports, the limit of Rs 15,000 can be increased to Rs 21,000 per month. However, this limit is applicable only to those companies where the total number of employees is more than 20.

Eight amendments have been done so far

The wage ceiling under EPFO ​​has been revised eight times since the inception of the scheme in 1952. It is running at ₹300 in 1952, ₹500 in 1957, ₹1,000 in 1962, ₹1,600 in 1976, ₹2,500 in 1985, ₹3,500 in 1990, ₹5,000 in 1994, ₹6,500 in 2001 and ₹15,000 since 2014.

The Employees’ Provident Funds and Miscellaneous Provisions Act of 1952 delegates major duty for providing social security coverage to India’s organised sector employees to the EPFO. It offers its members a number of services, including provident funds, pension payouts for members upon retirement, family pensions, and insurance coverage for members’ dependent families in the event of sudden death.

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