PM Viksit Bharat Rozgar Yojana: What a Startup or MSME Employer Can Actually Claim

The PM Viksit Bharat Rozgar Yojana (PMVBRY) completed one year on 1 August 2026, and it remains open for hires made until 31 July 2027. If you are hiring, Part B of the scheme can pay you up to ₹3,000 a month for each qualifying additional employee.

The catch is a headcount test that is harder than it looks for a very small or newly formed company.

What the scheme is

PMVBRY is a central government scheme run by the Employees' Provident Fund Organisation (EPFO), with a total outlay of ₹99,446 crore. It has two parts:

• Part A pays first-time employees a one-time incentive of one month's EPF wage, capped at ₹15,000.
• Part B pays employers who create additional jobs.

Scheme guidelines were issued on 15 August 2025, and a Standard Operating Procedure on calculating the incentive followed on 18 November 2025.

No special treatment for startups or MSMEs

Startups and MSMEs do not get a separate incentive rate or an automatic exemption from these rules, The Times of India reports. You can benefit if you are an eligible establishment, comply with EPFO filing requirements and create qualifying additional employment.

Step one: your baseline

Your baseline is the headcount you have to beat. According to EY India's summary of the procedure:

• Set up before 1 August 2024: your average employee headcount from 1 August 2024 to 31 July 2025.
• Set up after 1 August 2024: your average employee headcount up to 31 July 2025.
• Set up on or after 1 August 2025: a fixed baseline of 20.

That last line is the one small founders should read twice. A new company is treated as though it already has 20 employees, even if it has three. The Times of India's example is blunt: a new establishment with a baseline of 20 cannot claim the incentive merely by hiring a few people while remaining below the baseline and threshold.

So a small new company may simply not qualify for now.

One wording point to check: EY India describes this group as establishments set up on or after 1 August 2025, while The Times of India describes those registered with EPFO between 1 August 2025 and 31 July 2027. If your company was formed earlier but registered with EPFO later, confirm with EPFO or your adviser which baseline applies to you.

Step two: the hiring threshold

On top of the baseline, you must add:

• At least two additional employees if your baseline is below 50.
• At least five additional employees if your baseline is 50 or more.

This is checked every month, once you have crossed the threshold for the first time. EY India says the first six months use the six-month average from your monthly provident fund returns (Electronic Challan-cum-Returns, or ECRs), and that average must be above baseline plus threshold. From the 13th month it is the average of the last 12 months. Miss the test in a month and the incentive for that month is zero.

Step three: who counts as an eligible employee

• Joined between 1 August 2025 and 31 July 2027.
• Gross wages at joining of up to ₹1 lakh a month.
• Provident fund contributions received continuously for at least six completed months.

The Times of India says the incentive covers eligible first-time employees and re-joiners. KPMG in India adds that someone hired on more than ₹1 lakh a month counts towards your net additional employment, but no incentive is paid for that person.

What you can claim: the wage slabs

The amount depends on the employee's EPF wages, per month:

• Up to ₹10,000: 10% of EPF wages, up to ₹1,000.
• More than ₹10,000 and up to ₹20,000: ₹2,000.
• More than ₹20,000: ₹3,000.

EY India sets out the formula as average monthly incentive for your eligible employees multiplied by net additional employment. Net additional employment is the lower of two numbers: total employees minus baseline, or total eligible employees.

How long it runs: 24 months from the month the incentive first becomes payable, or 48 months for manufacturing establishments. A month without an incentive does not extend the period.

The Times of India offers an illustration. For an employee on EPF wages of ₹18,000, the monthly incentive is ₹2,000, which comes to a notional ₹48,000 over 24 months, or ₹96,000 over 48 months in manufacturing. These are illustrative calculations, not guaranteed payouts.

How the money is paid

EPFO calculates the incentive through its own IT system, based on the ECRs you file. EY India suggests preparing your own calculation for validation.

Sources describe the timing a little differently. EY India and KPMG in India say the first six months are paid as a lump sum after six months, with monthly payments after that. KPMG adds that the total is re-calculated at the end of each cycle and any remaining amount is paid. The Times of India describes six-monthly lump sums.

What can disqualify you

According to EY India and KPMG in India, no incentive is available where:

• Inquiries under section 7A, 7B or 7C of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 are pending. EY India also lists Para 26B of the EPF Scheme.
• Those inquiries have concluded, but appeals are pending or orders have not been complied with.
• EPFO has filed an FIR for fraudulent practices.
• There are pending or adverse decisions on inquiries related to the Atmanirbhar Bharat Rozgar Yojana or any other fraudulent practice.

Attrition matters too. If an employee leaves and is replaced, EY India says you are entitled to the incentive for the remaining period. KPMG in India notes that a first-timer who leaves for another establishment becomes ineligible for the incentive.

How to opt in

Per EY India, you exercise the option online under the EPFO Unified Employer Portal, providing your GST number and PAN-linked bank account details. The sources we reviewed do not give a separate last date for opting in, so don't assume one.

The Press Information Bureau adds that incentives are available only after an employee's Universal Account Number is authenticated through Face Authentication Technology on the UMANG app.

The government's numbers

The government aims to generate employment for over 3.5 crore people, including 1.92 crore first-time employees. Those are targets. In its 1 August 2026 backgrounder, the Press Information Bureau said over 72 lakh first-time employees have joined the formal workforce since August 2025, nearly 30% of beneficiaries are women, and more than 15 lakh beneficiaries have received incentives. These are government-reported figures.

What this means for you

• Work out your baseline first. If you were set up on or after 1 August 2025, start from 20. Otherwise, pull your ECRs for the baseline period and see how many hires it takes to clear baseline plus threshold.
• Clean up your records. KPMG in India advises updating PAN, GST and bank details on the EPFO portal, filing ECRs on time and completing Aadhaar authentication for employees. EY India suggests reconciling payroll data with ECRs every month.
• Have an open EPFO inquiry? Resolve it first, because it can block the incentive.

Sources: Press Information Bureau backgrounder; The Times of India; EY India alert; KPMG in India Tax Flash News.

Cover photo: EqualStock on Unsplash