EPFO ceiling hike: From ₹15,000 to ₹25,000, check your pension gain with this formula
The EPFO wage ceiling has been raised from ₹15,000 to ₹25,000, widening the scope of mandatory EPF and EPS coverage for eligible organised-sector employees. But how much can the higher ceiling add to your monthly pension? Here are five calculations based on different service periods.
- Sep 17, 2026,
- Updated Sep 17, 2026 4:35 AM IST
The government has approved an increase in the monthly wage ceiling for mandatory EPFO coverage from ₹15,000 to ₹25,000, a move that could expand EPF and Employees’ Pension Scheme (EPS) coverage among organised-sector employees. The revised ceiling comes into effect after having remained unchanged since September 1, 2014.
Union minister Ashwini Vaishnaw said the government will spend around ₹11,339 crore every year on the measure, which is aimed at widening social-security coverage.
How will the EPS pension change?
For employees covered under EPS, pension is calculated using the formula:
Monthly EPS pension = (Pensionable salary × Pensionable service) ÷ 70
Here, pensionable salary is the average monthly basic pay plus dearness allowance during the last 60 months before exiting the pension fund.
With the ceiling increasing from ₹15,000 to ₹25,000, the maximum pensionable salary used in the calculation can rise, resulting in a higher monthly pension for eligible employees.
For example, assuming a pensionable salary of ₹25,000, the difference between the old and new ceilings can be illustrated across different service periods.
| Eligible service | Pension at ₹15,000 ceiling | Pension at ₹25,000 ceiling | Extra pension |
|---|---|---|---|
| 10 years | ₹2,143 | ₹3,571 | ₹1,429 |
| 15 years | ₹3,214 | ₹5,357 | ₹2,143 |
| 20 years* | ₹4,714 | ₹7,857 | ₹3,143 |
| 25 years* | ₹5,786 | ₹9,643 | ₹3,857 |
| 30 years* | ₹6,857 | ₹11,429 | ₹4,571 |
*Includes the stated two-year service bonus for 20 years or more of service.
10 years of service
At 10 years of eligible service, the estimated EPS pension rises from ₹2,143 under the ₹15,000 ceiling to ₹3,571 under the ₹25,000 ceiling. This represents an additional ₹1,429 a month.
15 years of service
For 15 years of service, the pension increases from ₹3,214 to ₹5,357, giving an additional ₹2,143 per month.
20 years of service
After applying the two-year service bonus, 20 years becomes 22 years for the calculation. The estimated pension rises from ₹4,714 to ₹7,857, a monthly difference of ₹3,143.
25 years of service
With 27 years counted for pension calculation, the pension increases from ₹5,786 to ₹9,643, resulting in an additional ₹3,857 per month.
30 years of service
For 30 years of service, counted as 32 years after the bonus, the estimated pension rises from ₹6,857 to ₹11,429. The difference is ₹4,571 a month.
The examples show the potential impact of moving the pensionable wage ceiling from ₹15,000 to ₹25,000. However, the actual pension will depend on the employee's pensionable salary, eligible service and applicable EPS rules.
The government has approved an increase in the monthly wage ceiling for mandatory EPFO coverage from ₹15,000 to ₹25,000, a move that could expand EPF and Employees’ Pension Scheme (EPS) coverage among organised-sector employees. The revised ceiling comes into effect after having remained unchanged since September 1, 2014.
Union minister Ashwini Vaishnaw said the government will spend around ₹11,339 crore every year on the measure, which is aimed at widening social-security coverage.
How will the EPS pension change?
For employees covered under EPS, pension is calculated using the formula:
Monthly EPS pension = (Pensionable salary × Pensionable service) ÷ 70
Here, pensionable salary is the average monthly basic pay plus dearness allowance during the last 60 months before exiting the pension fund.
With the ceiling increasing from ₹15,000 to ₹25,000, the maximum pensionable salary used in the calculation can rise, resulting in a higher monthly pension for eligible employees.
For example, assuming a pensionable salary of ₹25,000, the difference between the old and new ceilings can be illustrated across different service periods.
| Eligible service | Pension at ₹15,000 ceiling | Pension at ₹25,000 ceiling | Extra pension |
|---|---|---|---|
| 10 years | ₹2,143 | ₹3,571 | ₹1,429 |
| 15 years | ₹3,214 | ₹5,357 | ₹2,143 |
| 20 years* | ₹4,714 | ₹7,857 | ₹3,143 |
| 25 years* | ₹5,786 | ₹9,643 | ₹3,857 |
| 30 years* | ₹6,857 | ₹11,429 | ₹4,571 |
*Includes the stated two-year service bonus for 20 years or more of service.
10 years of service
At 10 years of eligible service, the estimated EPS pension rises from ₹2,143 under the ₹15,000 ceiling to ₹3,571 under the ₹25,000 ceiling. This represents an additional ₹1,429 a month.
15 years of service
For 15 years of service, the pension increases from ₹3,214 to ₹5,357, giving an additional ₹2,143 per month.
20 years of service
After applying the two-year service bonus, 20 years becomes 22 years for the calculation. The estimated pension rises from ₹4,714 to ₹7,857, a monthly difference of ₹3,143.
25 years of service
With 27 years counted for pension calculation, the pension increases from ₹5,786 to ₹9,643, resulting in an additional ₹3,857 per month.
30 years of service
For 30 years of service, counted as 32 years after the bonus, the estimated pension rises from ₹6,857 to ₹11,429. The difference is ₹4,571 a month.
The examples show the potential impact of moving the pensionable wage ceiling from ₹15,000 to ₹25,000. However, the actual pension will depend on the employee's pensionable salary, eligible service and applicable EPS rules.