Government's 1.16% EPS contribution remains capped at Rs 15,000 wages despite higher EPFO ceiling

Key facts

• The Ministry of Labour and Employment amended the Employees' Pension Scheme, 2026 via Notification No. G.S.R. 890(E) dated October 15, 2026, specifying a monthly wage limit of Rs 15,000 for the government's contribution to the pension scheme.
• The amendment, effective from September 17, 2026, changes paragraph 4, sub-paragraph 2 of the Employees' Pension Scheme, 2026, replacing the earlier wording referring to an amount specified by the Central Government with 'wages upto rupees fifteen thousand (Rs 15,000/-) per month'.
• The statutory wage ceiling for mandatory EPFO coverage was raised from Rs 15,000 to Rs 25,000 per month, effective September 17, 2026, under Notification No. S.O. 5109(E).
• Despite the revised Rs 25,000 ceiling, the government's contribution to EPS remains 1.16% of wages up to Rs 15,000 per month, capped at a maximum of Rs 174 per month per member.
• The revised ceiling expands mandatory coverage under EPF, EPS and EDLI, and the EPFO estimates it will bring more than 51 lakh additional employees under mandatory coverage.
• The employer contributes 12% towards EPF and EPS components, with 8.33% allocated to EPS, while the employee contributes 12% of applicable EPF wages.
• The October 15 notification does not change the pension calculation formula or announce any increase or reduction in pension payable to members.