The government’s decision to increase the Employees’ Provident Fund (EPF) wage ceiling from Rs 15,000 to Rs 25,000 can help an employee create a significantly higher retirement corpus over a long service period if they contribute at the wage ceiling during their service.
Under the old wage ceiling of Rs 15,000, if an employee was contributing to the EPF scheme at the wage ceiling limit, their monthly contribution was Rs 1,800 a month (12% of Rs 15,000). The same contribution was also from the employer’s side. With the new wage ceiling of Rs 25,000, the EPF contribution will also increase to Rs 3,000 per month (12% of Rs 25,000). A higher monthly contribution can create a significantly higher corpus for an employee if they contribute to the EPF at the wage ceiling.
