EPFO has informed members that their salary will be raised starting from May 2025. With the revised maximum PF limit, lakhs of employees will directly enjoy the benefits of the salary hike announced in May 2025 by EPFO. It was decided based on the current inflation and how the economy is faring. Inform us about the effects this raise will have on your take-home salary and provident fund.
Change In Salary Limit
In EPFO, the monthly salary for PF contribution was increased from ₹ 15,000 to ₹ 21,000. So, the basic salary up to ₹ 21,000 will have PF deduction at 12%. It will be most beneficial for workers who are low-paid, as their PF funds will become bigger and they have more chance of earning returns on them.
Impact On Pension Scheme
Because the salary limit has increased, the EPS has also been affected. Contribution to a pension account will now be 8.33% of your salary up to a maximum of ₹ 21,000. With this, the pension fund will increase, letting employees enjoy a bigger retirement pension. It will benefit employees who have spent many years working for the company the most.
Optional PF Contribution Facility
Now, EPFO is offering a unique facility for high-earning employees. They are now allowed to deposit more than 12% of their basic salary into the Voluntary Provident Fund (VPF). This will make tax planning easier and more attractive for them. It is particularly useful for workers who wish to save more.
Benefits For Employees
As a result of this, employees will see their PF payouts increase, meaning they can expect to get a larger sum when they need it in the future. Additionally, raising the pension fund will provide more security for financial needs after retiring. EPFO made sure the change does not reduce the monthly take-home pay of their employees by much.
Conclusion
This raise in salary by EPFO is good news for employees. This will help them grow their wealth and ensure they are prepared for the future. Similarly, if you use the EPFO and are an EPFO member, keep in mind these new strategies that begin in May 2025 and decide what suits your plans best. Go on making PF contributions and enjoy the benefits of this hike.
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