EPS Pension Calculation: What Is The Maximum Pension You Can Receive Under EPS?
Share this article:
The Employees’ Pension Scheme (EPS), introduced in 1995, is a retirement benefit available to members of the Employees’ Provident Fund Organisation (EPFO). It ensures pension support for employees in the organised sector. Both existing and new members of EPFO are eligible to benefit from EPS.
This guide explains how EPS works, what portion of contributions go towards it, eligibility criteria, withdrawal rules, and most importantly the maximum pension you can get under EPS.
How much does an employee contribute to EPF?
Both the employee and employer contribute 12% of the basic salary to the Employee Provident Fund (EPF).
How much goes into EPS?
Out of the 12% contribution, 8.33% is directed towards EPS, while the remaining 3.67% goes into the EPF account of the employee.
Who is eligible for EPS benefits?
To receive EPS benefits, an individual must:
Can employees withdraw EPS early?
Yes, employees can withdraw EPS at a reduced pension rate from the age of 50 years.
Can EPS pension be deferred?
Yes, EPS members may defer their pension up to 60 years of age. In such cases, they receive an additional 4% pension for each year of delay after 58.
What is the minimum EPS pension?
The minimum pension amount is ₹1,000 per month.
What is the maximum EPS pension ?
The maximum pension depends on two fixed limits:
Thus, the highest monthly EPS pension an employee can receive is ₹7,500.
EPS Pension Calculation Example
The EPS pension is calculated using the formula:
(Pensionable Salary × Pensionable Service) ÷ 70
For example, if 8.33% of an employee’s basic salary and DA is ₹6,000, only ₹1,250 will go to the EPS account, while the remaining ₹4,750 goes to the EPF account (which earns interest). Importantly, EPS contributions do not earn interest.
Under EPS, the maximum pension amount is fixed at ₹7,500 per month, provided the employee has 35 years of service and a pensionable salary of ₹15,000.
This guide explains how EPS works, what portion of contributions go towards it, eligibility criteria, withdrawal rules, and most importantly the maximum pension you can get under EPS.
How much does an employee contribute to EPF?
Both the employee and employer contribute 12% of the basic salary to the Employee Provident Fund (EPF).
How much goes into EPS?
Out of the 12% contribution, 8.33% is directed towards EPS, while the remaining 3.67% goes into the EPF account of the employee.
Who is eligible for EPS benefits?
To receive EPS benefits, an individual must:
- Be an EPFO member.
- Complete at least 10 years of service.
- Attain the minimum age of 58 years.
Can employees withdraw EPS early?
Yes, employees can withdraw EPS at a reduced pension rate from the age of 50 years.
Can EPS pension be deferred?
Yes, EPS members may defer their pension up to 60 years of age. In such cases, they receive an additional 4% pension for each year of delay after 58.
What is the minimum EPS pension?
The minimum pension amount is ₹1,000 per month.
What is the maximum EPS pension ?
The maximum pension depends on two fixed limits:
- Pensionable Salary: ₹15,000
- Maximum Service Years: 35
Thus, the highest monthly EPS pension an employee can receive is ₹7,500.
EPS Pension Calculation Example
The EPS pension is calculated using the formula:
(Pensionable Salary × Pensionable Service) ÷ 70
- Pensionable Salary: ₹15,000 (fixed)
- Pensionable Service: 35 years
- Maximum Monthly Pension: ₹7,500
For example, if 8.33% of an employee’s basic salary and DA is ₹6,000, only ₹1,250 will go to the EPS account, while the remaining ₹4,750 goes to the EPF account (which earns interest). Importantly, EPS contributions do not earn interest.
Under EPS, the maximum pension amount is fixed at ₹7,500 per month, provided the employee has 35 years of service and a pensionable salary of ₹15,000.
Next Story