EPFO ELI Scheme: Who Qualifies, What Employers and Staff Get

If you hired anyone after August 2025, the government may owe you money.

It may owe your new employee money too. Most businesses have not claimed either.

This guide covers the ELI scheme, which now runs as PM-VBRY. It sets out who qualifies, how much each side gets, and what stops the payment.

It is written for the HR or payroll team that files the ECRs, and for the owner who signs off the hiring.

What Is the ELI Scheme?

This trips people up before they start, so it is worth clearing in one paragraph.

The Employment Linked Incentive scheme was announced in the Union Budget for 2024-25. By the time it started it had a different name. The Ministry of Labour and Employment announced on 25 July 2025 that the ELI scheme would come into effect from 1 August 2025 as the PM Viksit Bharat Rozgar Yojana, shortened to PM-VBRY.

It is the same scheme. EPFO runs it, EPFO’s scheme site sits at pmvbry.epfindia.gov.in, and the guidelines carry the new name throughout. If your accountant still calls it ELI, you are both talking about the same thing, and this guide uses whichever name is clearer in the sentence.

Who Qualifies for the ELI Scheme?

A first timer is not simply a new employee, and the difference decides who gets paid.

EPFO sets three conditions, and all three have to be true:

1. The joining date falls between 1 August 2025 and 31 July 2027, both dates included.
2. The person was not a contributing EPF member before 1 August 2025, whether through EPFO or through an exempted trust.
3. Their contribution reaches EPFO, or the exempted trust, for the first time for the wage month of August 2025 or later.

So a fresher who joined a textile mill in October 2025 with no prior PF history is a first timer. Somebody who worked at a warehouse in 2023, left, and joined you last month is not. That second person has a name in the scheme too. They are a re-joinee, and they matter for Part B even though they get nothing under Part A.

A retail example makes the second case concrete. If a supermarket chain in Indore takes on a cashier who had a PF account at a previous store, that person is a re-joinee however new they are to you. Their history sits with EPFO, not with your payroll.

There is a wage condition on top. The first timer’s gross wages at the time of joining must be up to ₹1 lakh a month. Gross wage here means all emoluments, cash or kind, under the employment contract.

What a First-Timer Employee Actually Gets

The headline figure is ₹15,000. The way it arrives is less widely understood, and the first instalment is smaller than most people expect.

The scheme guidelines set the total at one completed month’s EPF wage, up to a limit of ₹15,000, paid in two parts:

1. First instalment, up to ₹7,500. It is half the average EPF wage over six continuous completed months, and it is payable once the employer has filed six completed months of ECRs with contributions.
2. Second instalment, the balance. It is the average of twelve completed months’ EPF wage, minus what was already paid, with the total held to ₹15,000.

The second instalment carries extra conditions. The employee has to finish EPFO’s financial literacy course, and the employer has to have filed all twelve months of ECRs. There is a deadline on that: the twelve ECRs must be filed within eighteen months of the joining date.

One more thing about the second instalment, and it surprises people. It is not paid straight into the employee’s hands. The guidelines say it is kept in a savings instrument or deposit account for a specified period, so the employee can draw it later rather than immediately.

Money moves by direct benefit transfer to an Aadhaar-linked account. To have an account in the system at all, the employee generates a UAN through face authentication on the UMANG app and hands that number to the employer for the ECR.

What the ELI Scheme Pays an Employer

Part B is where the larger money sits for a business, and where most of the conditions live. It pays on both first timers and re-joinees.

The rate depends on what the additional employee earns:

The lowest slab is a percentage, not a flat sum, so it is worth seeing worked. The SOP’s own example: an EPF wage of ₹9,500 earns the employer ₹950 a month.

Before any of that applies, the business has to clear a threshold. It is counted against a baseline, which is your own earlier headcount:

1. Baseline under 50: you need at least 2 additional employments.
2. Baseline of 50 or more: you need at least 5.

And the threshold has to be sustained for at least six months. A month in which you fall below it simply does not pay, and the guidelines are explicit that there is no extension of the incentive period to make up for the gap. You lose that month.

Payment is not monthly either. It arrives as a six-monthly lump sum after six completed months of ECRs, and only for people who have completed six months with you. A diagnostic lab chain that hires three technicians in April and loses one in July has a different claim from the one it expected in April.

Some businesses are blocked from Part B altogether.

An open inquiry under section 7A, 7B or 7C of the EPF and MP Act, 1952 blocks it. So does one under paragraph 26-B of the EPF Scheme.

The block stays if the order was passed and then appealed, or simply not followed. An FIR from EPFO for fraud blocks it too, and so does a pending finding on ABRY.

How Your Headcount Baseline Is Set

The baseline decides everything in Part B, and EPFO’s scheme FAQs set it differently depending on when you registered with EPFO.

1. Registered before 31 July 2024 and filing regularly. Your baseline is the average number of employees across the ECRs for August 2024 to July 2025.
2. Registered between 1 August 2024 and 31 July 2025. Your baseline is the average across every month up to 31 July 2025.
3. Registered on or after 1 August 2025. Your baseline is 20.

Read the third one again if you run a young business. A company that registered with EPFO in, say, March 2026 does not start from its own small headcount. It starts from twenty, because that is the point at which EPFO registration becomes mandatory. Only jobs above twenty count, and the threshold sits on top of that.

For an IT services startup of eleven people, that is the difference between a scheme worth budgeting for and one that pays nothing for a long while. That baseline rule is the single most misunderstood line in the guidelines.

Attendo (formerly Petpooja Payroll) is made for every business, small or large. It is one place for attendance, payroll and the statutory filings that go with them.

Joining dates, PF wages and the attendance to salary workflow sit together. So the list of who joined after 1 August 2025, and what they earn, is a report you pull rather than a thing you rebuild.

What Stops an ELI Scheme Payment

Money can also stop after it starts, and one of the traps here catches businesses that believe they are fully compliant.

Payment ceases when the person leaves, and the wording is blunt: on their own volition or otherwise, so a resignation and a dismissal have the same effect. The guidelines put that against a first timer, and EPFO’s later calculation SOP applies it to re-joinees as well. Payment also ends on the death of the beneficiary, on closure of the establishment, and on any misrepresentation or fraud.

There is also a trap for anyone using a manpower agency. EPFO’s FAQs are direct about it: the establishment that files the ECR with contributions is the one that can claim. If an agency is on the ECR for those workers, the incentive follows the agency, not the site where the people actually work.

On tax, the guidelines say the incentives are subject to income tax unless a specific exemption order is issued. Treat the money as taxable until you see one.

Is the ELI Scheme Actually Paying Out?

A fair question, since schemes are announced more often than they disburse.

It is paying. On 19 June 2026 the Prime Minister disbursed around ₹2,400 crore under PM-VBRY, an amount the release says supported the creation of 15 lakh employment opportunities. The scheme was approved with an outlay of ₹99,446 crore and a target of more than 3.5 crore jobs across its two years.

The window is the thing to watch. Benefits apply to jobs created between 1 August 2025 and 31 July 2027, and a first timer needs twelve months of ECRs to collect the second instalment. Somebody hired in July 2027 is still inside the scheme, but their second instalment depends on twelve months of ECRs, which runs well into 2028.

What Payroll Should Do This Month

Five steps, and the first two matter more than the rest because everything else depends on them.

1. Exercise the option on EPFO’s Unified Portal. Every registered establishment is deemed registered for the scheme, but the money needs you to opt in and supply your GST number and PAN.
2. Check your ECR filing is current and correct. Every benefit in this scheme is calculated from ECRs. A late or wrong one costs a month that never comes back.
3. Find out what baseline EPFO holds for your code. This decides whether you need 2 additional employees or 5, or whether you are counting from twenty.
4. List everyone who joined on or after 1 August 2025 and mark who is a first timer and who is a re-joinee. Both count for Part B, only the first counts for Part A.
5. Tell your first timers to finish the financial literacy course. Without it their second instalment does not come, and that is the larger half.

The employee side needs a UAN generated by face authentication on the UMANG app, seeded with Aadhaar, before any of it works. That is worth doing at onboarding rather than in month five, and if you take people on in batches, a bulk upload is where the numbers usually go astray.

Frequently Asked Questions