EPF Salary Limit Increased: By raising the limit to ₹ 21,000, more employees will be covered under the Employees Retirement Plan.
It will also align the limit with other social security scheme Employees State Insurance Corporation (ESIC) where the limit is ₹ 21,000
A high level committee has proposed to increase the salary limit under Employees’ Provident Fund Organization (EPFO) to Rs 21,000 per month from the existing Rs 15,000. However, the committee has said that the government may implement retrospective hike after considering all proposals.
The proposal, once implemented, will bring an estimated 7.5 lakh additional workers under the purview of the scheme, and will also adjust for the increase in wages as last revised in 2014.
A senior government official said, “If this suggestion is accepted by the EPFO’s Central Board of Trustees, it will give relief to employers who are willing to bear any additional financial burden immediately.” are reluctant.”
The employers in their consultations cited stress on their balance sheets due to the outbreak of the pandemic and sought more time to implement the proposed hike.
This will also be a matter of relief for the exchequer, as the Center currently pays around Rs 6,750 crore every year for the EPFO Employees Pension Scheme. The government contributes 1.16 percent of the total basic salary of EPFO subscribers for this scheme.
Under the existing rules, any company with more than 20 employees must be registered with the EPFO and the EPF scheme is mandatory for all employees with an income of Rs 15,000.
By raising the limit to ₹21,000, more employees will be covered under the retirement plan. This will also align the limit with other social security scheme Employees State Insurance Corporation (ESIC) where the limit is ₹ 21,000.
KE Raghunathan, an employer’s representative in EPFO-‘s Central Board of Trustees, said that there is a consensus within the EPFO that the same norms should be followed for providing social security under both EPFO and ESIC. should go.
The difference in norms under both the schemes should not deprive workers of their social security benefits,” he said. However, trade unions fear that the implementation of the decision may take a very long time.
