What will happen if the government increases the salary cap of the Employees' Provident Fund Organization (EPFO)

EPFO provides several services to its members including provident fund, pension benefits to the members on their retirement and family pension and insurance benefits to their families in case of untimely death of the member.

The government may revise the salary cap for the flagship retirement savings scheme of the Employees' Provident Fund Organization (EPFO). As of now, the salary limit for the Employees' Provident Fund (EPF) scheme is ₹15,000 per month. The Economic Times reported that a committee would be set up to fix a higher wage ceiling.

If the salary cap is revised, it will lead to an increase in the mandatory contribution of both employees and employers. An employer contributes 12 per cent of workers' basic salary to the provident fund, while the government contributes 1.16 per cent to the Employees' Pension Scheme for each employee, with a wage ceiling of ₹15,000. Of the 12 percent employer share, 8.33 percent goes to the beneficiary's pension account.

The wage ceiling under EPFO ​​has been revised only eight times since the inception of the scheme in 1952. It was ₹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 from 2014.

EPFO is India's premier organization responsible for providing social security coverage to the organized sector workforce under the Employees' Provident Fund and Miscellaneous Provisions Act, 1952. It provides many services to its members including provident fund, pension benefits. Retirement and family pension and insurance benefits to their families in case of untimely death of the member.

The provisional payroll data of the Employees' Provident Fund Organization (EPFO) released on Sunday shows that the EPFO ​​has added 16.82 lakh net subscribers in the month of September 2022, a 9.14 per cent increase in net membership as compared to the same month during the previous month. Is. Year, 2021.

As compared to the monthly average recorded during the previous financial year, the net enrollment during the month is higher by 21.85 per cent.

According to the Ministry of Labor and Employment, around 2861 new establishments have started complying with the Employees' Provident Fund and Miscellaneous Provisions Act, 1952, to ensure social security cover to their employees.