EPFO salary limit increase: The central government is planning to strengthen the social security scheme for employees so that they can save more and get more pension on retirement. The Ministry of Labor and Employment may double the minimum wage limit under Employees' Provident Fund (EPF) and Employees' State Insurance Corporation (ESIC) from Rs 15,000 to Rs 30,000, to make it mandatory to bring the maximum number of employees under EPF-ESIC. . , With this decision of the government, about 1 crore new employees will be successfully brought under the social security ambit of EPF-ESIC.
The salary limit was increased in 2014
The salary limit for deduction of EPF-ESIC from the basic salary of employees was last increased in 2014. Then the minimum salary limit was increased from Rs 6500 to Rs 15000. Now preparations are underway to increase it again after 10 years. Due to increase in EPF-ESIC salary limit, more money can be deducted from the salary of employees for provident fund. With this, the employee can contribute more than his salary to the provident fund.
More amount will be deposited in EPF account!
Both the employee and the employer have to contribute to the Employees Provident Fund. Employees are required to contribute 12% of their basic salary to EPF. Employees do not have to make any contribution in EPS, but out of 12 percent of the employer's basic salary in the EPS i.e. Employees Pension Scheme, 8.33% has to be deposited in the EPS and 3.67% in the EPF account of the employees. Due to increase in salary limit for EPF, more amount will be deposited in the EPF account of the employees. For example, if the basic salary of an employee is currently Rs 15000, then Rs 1800 is deposited in the EPF account. At the same time, if the salary limit is increased to Rs 30,000, then Rs 3,600 will be deposited in the EPF account of employees whose basic salary is Rs 30,000.
More employees will come under the ambit of EPF
EPF-EPS salary limit is the limit under which employees are required to make statutory contributions to EPF-ESIC on their own behalf. Currently if the basic salary of an employee is more than Rs 15000, he can opt out of EPF. But if the salary limit is increased to Rs. More than 30,000 people will come under the ambit of EPF. At present 7 crore subscribers are members of EPFO.
Consensus reached in CBT
This issue was also discussed in the meeting of the Central Board of Trustees of EPFO on Saturday 30 November 2024. From the Labor Ministry to the members of the Central Board of Trustees (CBT) are in favor of increasing the salary limit. And it is believed that a final decision on this can be taken in the meeting of the Central Board of Trustees to be held in the month of February in the new year 2025.
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