ELI Scheme: Eligibility, Benefits, Coverage, and Application Process
The Government of India has approved the ELI scheme on 01 July 2025. It is designed to strengthen job creation, improve employability, and expand social security coverage across all sectors.
With a financial outlay of Rs 99,446 crore, the scheme aims to support the creation of more than 3.5 crore jobs over two years. It is expected that 1.92 crore of these beneficiaries will be first-time employees who are entering the formal workforce.
ELI Scheme Meaning
The ELI full form is the Employment Linked Incentive (ELI) Scheme.
It aims to support the creation of approximately three and a half crore formal jobs by encouraging employers to hire and register new workers under the Employees Provident Fund Organisation. The ELI scheme benefits will cover direct wage support for eligible first-time workers. It also offers hiring incentives to employers for appointments made between August 2025 and July 2027.
It aims to support employment generation, enhance employability, and social security across all sectors, with special focus on the manufacturing sector. ELI is a Central Sector Scheme.
The ELI Scheme will be implemented by the Ministry of Labour and Employment through the Employees Provident Fund Organisation, a statutory body under the Employees’ Provident Funds and Miscellaneous Provisions Act of 1952.
Incentive Meaning in a Job
In this scheme, an incentive refers to a financial benefit provided either to employees or employers to support job creation, encourage workforce formalisation, and reduce hiring costs. It rewards both parties for participating in long-term, stable employment.
ELI Scheme Coverage
The scheme covers all sectors across India, with special focus on manufacturing.
It covers first-time employees, rejoiners, and all establishments registered with EPFO or exempted establishments that comply with the reporting requirements.
ELI Under Schemes
The Employment Linked Incentive Scheme operates as a Central Sector Scheme under the Ministry of Labour and Employment and is executed through the Employees Provident Fund Organisation.
It functions under the legal framework of the Employees Provident Funds and Miscellaneous Provisions Act of 1952, ensuring that incentives, reporting, baseline calculation, and verification are all conducted through EPFO’s regulatory systems.
Part A: Incentive to First-Time Employees
This part will offer a one-month wage that is Basic and dearness allowance up to ₹15,000 in two instalments.
- Employees with gross wages up to ₹1 lakh will be eligible.
- The first instalment up to ₹7,500, will be payable after 6 months of employment, and the second instalment will be payable after 12 months of employment and completion of a financial literacy program by the employee.
- The Financial Literacy Course will be provided online through the EPFO portal.
- To inculcate the habit of saving, the second instalment will be kept in a savings instrument for a fixed period and can be withdrawn by the employee at a later date.
- The eligible employees will get a time incentive only. No incentive will be given to the employer under this part.
A first timer is any employee who joins an establishment between 01.08.2025 and 31.07.2027 and whose contribution is received for the first time in EPFO or the Exempted Trust.
Part B: Support to Employers
This part will provide an incentive for the generation of additional employment in all sectors, with a special focus on the manufacturing sector.
- The employers will get incentives with respect to each additional employee with a gross wage of up to ₹1 lakh per month.
Know the difference between gross salary and net salary!
- The incentive shall be paid for 2 years, and for the establishments engaged in the manufacturing sector, the incentives will be provided for 4 years.
Under this part, the establishment will get an incentive up to ₹3000 per month for each additional employee, both first timer and rejoiner, for a sustained period of at least six months as per the following incentive structure:
| Wage (Basic + DA) of Additional Employee | Benefit to the Employer Per Month |
| Up to ₹10,000 | Up to ₹1,000 |
| More than ₹10,000 and up to ₹20,000 | ₹2,000 |
| More than ₹20,000 | ₹3,000 |
In respect of employees getting wages below ₹10,000, the incentive at the rate of 10 percent of the wage will be provided.
A rejoinee is any employee who has an Aadhaar authenticated UAN and is already a member of EPFO or an exempted trust but joins an establishment during the scheme period between 01.08.2025 and 31.07.2027.
Baseline Rules for Employer Eligibility Under the ELI Scheme
To be eligible under this part, the establishments must hire above baseline at least two additional employees for employers with less than 50 existing employees or five additional employees for employers with 50 or more existing employees on a sustained basis for at least six months.
Baseline definitions:
- Establishments registered with EPFO for more than 12 months as on 01.08.2025: baseline is the average number of employees for all 12 previous months up to July 2025.
- Establishments registered with EPFO for less than 12 months prior to 01.08.2025: baseline is the average number of employees for all months till 01.08.2025.
- Establishments registered in EPFO during 01.08.2025 to 31.07.2027: baseline is 20 employees.
Exempted establishments must file Electronic Challan cum Return without contributions in EPFO, provide details of all employees, including first timers, and open Universal Account Numbers for all employees using the UMANG Portal.
There is no incentive for the employee in this part.
ELI Incentive Payment Mechanism
All payments to first-time employees under Part A will be made through Direct Benefit Transfer using the Aadhaar Bridge Payment System.
Payments to employers under Part B will be made into PAN-linked accounts.
Eligibility calculation, baseline calculation, and incentive computation will be automated through an information technology system being developed by EPFO.
ELI Scheme Eligibility
The scheme’s eligibility depends on whether the applicant is an employee or an employer.
The scheme consists of two parts, with Part A focused on first-time employees and Part B focused on employers.
ELI Scheme Eligibility Criteria for Employees
| Criteria | Requirement |
| Monthly wage limit | Up to ₹1,00,000 |
| EPFO status | Must be a first-time EPFO-registered employee |
| Identification | UAN and Aadhaar must be seeded |
| Employment duration | Must remain in continuous employment for at least six months |
ELI Scheme Eligibility Criteria for Employers
| Criteria | Requirement |
| EPFO registration | The employer must be registered with the Employees Provident Fund Organisation |
| Minimum hiring requirement | Employers with fewer than fifty employees must hire at least two additional employees; employers with fifty or more employees must hire at least five additional employees |
| Sustained employment | New hires must remain in employment for a minimum of six months for the employer to qualify for incentives |
Benefits of the ELI Scheme
Below are the scheme benefits as officially described:
ELI Scheme benefits for the employee:
- Formalisation of the job through the expansion of social security coverage
- On-the-job training making first-timers employable
- Improved employability through sustained employment
- Financial literacy skills
ELI Scheme benefits for the employers:
- Offset cost of additional job creation
- Enhancing workforce stability and productivity
- Incentivise coverage of social security
How to Apply for the ELI Scheme Online?
The online application system will be implemented through the EPFO portal.
For Employees
You must activate your UAN on the EPFO Member Portal using your Aadhaar details and mobile number.
Ensure your Aadhaar is linked to your bank account, then complete the financial literacy course to receive the second instalment.
For Employers
You must maintain a valid EPFO registration and hire eligible employees earning below one lakh rupees per month.
Submit accurate PAN and GST details and file monthly ECRs on time.
Disclaimer– The rankings and figures in this article have been compiled from multiple verified reports, credible news sources, and public financial data available as of 2025.
All values are approximate and may vary with newer updates, revisions, or changes in official records.
ELI Scheme New – FAQs
The Employment Linked Incentive scheme encourages formal job creation in India through EPFO registration. It rewards both new workers and employers who generate additional employment.
It was announced in the Union Budget 2024 to 2025 and approved by the Union Cabinet. The Ministry of Labour and Employment implements it through the EPFO.
It gives first-time employees a one-time incentive equal to one month of wages, capped at fifteen thousand rupees. This amount is paid in two instalments and is not a monthly benefit.
It supports young individuals entering the formal workforce with an incentive of up to fifteen thousand rupees. It also connects them to EPF-based social security and basic financial literacy.
Eligibility is verified automatically through employer EPFO filings. You only need an active UAN with your Aadhaar and bank details correctly linked.
The three thousand rupee support is meant for employers hiring additional workers under the ELI scheme. It is not a direct benefit linked to the e shram card.
There is no specific age limit, but EPFO eligibility generally covers people from eighteen to fifty-four years. The scheme mainly focuses on supporting youth entering formal jobs.
Source: epfindia.gov.in
