Quick answer: EPS (Employees' Pension Scheme) is the pension part of PF. It is funded by 8.33% of wages from the employer's 12% PF share, on wages up to the ceiling, plus 1.16% from the Central Government. With the ceiling at ₹25,000 from 17 September 2026, the employer's EPS contribution is capped at ₹2,083 a month (earlier ₹1,250). Nothing is deducted from the employee for EPS. A monthly pension needs 10 years of service and starts at 58 (reduced pension from 50). The Employees' Pension Scheme, 2026 replaced EPS 1995 from June 2026.
Most payslips show PF as one line, but the employer's 12% is actually split between two funds: the employee's EPF savings account and the pension fund. That split decides how much an employee builds up in PF and what pension they can expect after 58. The split changed in September 2026, when the PF wage ceiling rose to ₹25,000. This guide explains how EPS works now: the contribution, who is eligible, how pension is calculated, what happens if you leave early, and what employers must do. To estimate a pension, use our EPF pension calculator; for PF as a whole, see our PF guide.
What is EPS?
The Employees' Pension Scheme provides a monthly pension to PF members after retirement, and pensions to the member's family if the member dies. It was set up in 1995. On 29 June 2026, the Labour Ministry notified the Employees' Pension Scheme, 2026 under the Code on Social Security, 2020, which replaced EPS 1995 and the 1971 Family Pension Scheme; existing funds, service and pensions carried over to the new scheme (SCC Online summary). EPFO continues to run it.
EPS is different from EPF. EPF is the member's own savings account that earns interest and is paid out as a lump sum; EPS is a pooled pension fund that pays a monthly pension based on a formula, not on the money credited.
How the PF contribution is split
| Contribution | Goes to | At PF wages of ₹25,000 | At PF wages of ₹15,000 |
|---|---|---|---|
| Employee 12% | EPF account | ₹3,000 | ₹1,800 |
| Employer 8.33% (up to ceiling) | EPS pension fund | ₹2,083 | ₹1,250 |
| Employer balance (12% − EPS) | EPF account | ₹917 | ₹550 |
| Central Government 1.16% | EPS pension fund | Paid by Government | Paid by Government |
When PF wages exceed ₹25,000 and the employer contributes 12% on full wages, the EPS share stays at ₹2,083 and everything above it goes to EPF. For example, at PF wages of ₹40,000, the employer pays ₹4,800: ₹2,083 to EPS and ₹2,717 to EPF. Our PF wage ceiling guide explains how the ₹25,000 limit applies.
What changed in 2026
- New scheme: the Employees' Pension Scheme, 2026 replaced EPS 1995 from June 2026, under the Code on Social Security. The employer's 8.33% and the Government's 1.16% continue.
- Higher ceiling: from 17 September 2026 the wage ceiling is ₹25,000, so the maximum employer EPS contribution rose from ₹1,250 to ₹2,083 a month.
- More members: after an amendment notified in September 2026, EPF members who were outside EPS because they joined above the old ₹15,000 ceiling become eligible for EPS if their wages are at or below ₹25,000 (SCC Online on the amendment).
Whether the higher ceiling also raises the pensionable salary used in the pension formula, and from when, depends on the scheme provisions and EPFO's instructions; sources differ, so check the latest EPFO guidance before estimating pension on wages above ₹15,000.
Who is eligible for EPS?
- EPF members within the ceiling: employees whose PF wages are at or below ₹25,000 are EPS members.
- Existing EPS members: remain members even if their salary later rises above the ceiling; the contribution stays capped at ₹2,083.
- Members who joined on or after 1 September 2014 above ₹15,000: were kept out of EPS under the old rules, with the full employer 12% going to EPF; from 17 September 2026 those with wages up to ₹25,000 come into EPS.
- Members above ₹25,000 who were never in EPS: remain outside EPS.
- International workers: covered by special provisions; check the scheme rules for each case.
For whether PF itself is mandatory for an employee, see our guide Is PF and ESI mandatory?
When is EPS pension paid?
| Situation | Benefit |
|---|---|
| Age 58 with at least 10 years of eligible service | Monthly pension (superannuation) |
| Age 50 to 57 with at least 10 years | Early (reduced) pension, about 4% less for each year before 58 |
| Deferring after 58, up to 60 | Higher pension, about 4% more for each year deferred |
| Leaving with less than 10 years | Withdrawal benefit (lump sum) or scheme certificate |
| Permanent and total disablement in service (at least one month's contribution) | Disablement pension, regardless of length of service |
| Death of member or pensioner | Widow/widower, children's and orphan pensions, or pension to a nominee or dependent parents |
How EPS pension is calculated
The basic formula is:
Monthly pension = Pensionable salary × Pensionable service ÷ 70
- Pensionable salary is the average monthly pay over the last 60 months of contributory service before exit, subject to the ceiling that applies.
- Pensionable service is the total eligible service in years; a bonus of two years is added for those with 20 or more years of service.
- Minimum pension is ₹1,000 a month.
Example: an employee retires at 58 with 25 years of service and a pensionable salary of ₹15,000. Service with the 2-year bonus is 27 years, so the pension is ₹15,000 × 27 ÷ 70 = ₹5,786 a month. A pensionable salary of ₹25,000 for the same service would give ₹9,643, but whether and when the higher ceiling counts in the pensionable salary depends on the scheme provisions. Our EPF pension calculator works out estimates for different scenarios.
If you leave before 10 years
EPS service is portable. If you move to another PF-covered employer, your service continues on the same UAN, and only total eligible service matters. If you stop PF-covered employment with less than 10 years of service, you can either claim the withdrawal benefit, a lump sum worked out from your service and salary, or take a scheme certificate, which keeps the service on record so it counts towards pension if you rejoin later. Under EPS 2026, the withdrawal benefit can be claimed only after 36 months from the date the last contribution was due, or on reaching superannuation age if earlier. The usual forms are Form 10C for the withdrawal benefit or scheme certificate and Form 10D for a monthly pension, filed online through the EPFO member portal using the UAN. Once you have 10 years of service, you cannot withdraw EPS as a lump sum; you receive a pension from age 50 or 58.
Higher pension on actual wages
Members who were in service on or before 1 September 2014, contributed to PF on wages above the then ceiling and exercised a valid joint option can get pension on higher wages under the Supreme Court's judgment of 4 November 2022. Under EPS 2026, the employer pays an additional 1.16% on wages above ₹15,000 for these members, an effective 9.49%. This depends on the member's history and options exercised; check EPFO's instructions for individual cases.
Family pension under EPS
EPS also protects the family. If a member dies in service, the spouse receives a widow or widower pension even if the member had not completed 10 years, and children receive children's pension, generally up to two children at a time until age 25, with a higher orphan pension if there is no surviving spouse. If there is no family, the pension goes to the nominee or, failing that, dependent parents. The ₹1,000 minimum applies to member and widow or widower pension; children's and orphan pensions are paid at their own rates. Family members claim through EPFO with the member's UAN and the required documents; employers should help the family file the claim and the EDLI claim together.
How to check your EPS contributions
Your EPF passbook on the EPFO member portal shows three columns for each month: employee share, employer share to EPF, and the pension (EPS) contribution. Check that the pension column shows 8.33% of your PF wages, up to ₹2,083, and that your service history with each employer is linked to your UAN. If EPS is missing for months when you were eligible, raise it with your employer, who can correct it through the ECR process.
Common EPS mistakes by employers
- Not applying the new ceiling: continuing to cap EPS at ₹1,250 after 17 September 2026.
- Wrong eligibility flag: keeping members out of EPS who came into it in September 2026, or putting ineligible members in.
- Paying EPS after 58: the pension share stops at 58 and the full employer 12% then goes to EPF.
- No date of exit: members cannot claim pension or withdrawal benefit until the exit is recorded.
What employers must do
- Split correctly: report EPS and EPF shares separately in the monthly ECR; EPS wages cannot exceed EPF wages, and the EPS share is capped at ₹2,083, except for members with a valid higher-pension option.
- Apply eligibility: mark EPS eligibility correctly at joining and update it for members who came into EPS from 17 September 2026.
- Age 58: stop the EPS share once an employee reaches 58, and send the full employer 12% to EPF.
- Exits: update the date of exit so members can claim pension, withdrawal benefit or a scheme certificate.
See our PF ECR filing guide for the return format, and the PF calculator to check the monthly split.
EPS vs EPF vs EDLI
| EPF | EPS | EDLI | |
|---|---|---|---|
| What it is | Savings account | Pension fund | Life insurance |
| Funded by | Employee 12% + employer balance | Employer 8.33% (capped) + Government 1.16% | Employer 0.5% (capped) |
| Benefit | Lump sum with interest | Monthly pension | Payment to nominee on death in service |
| Withdrawal | On retirement or as allowed | Only withdrawal benefit if under 10 years | Not applicable |
Estimate your pension. Use the free EPF pension calculator to see what EPS could pay, and the PF calculator to check the monthly EPS and EPF split.
Frequently asked questions
What is EPS in PF?
EPS is the Employees' Pension Scheme, the pension part of the provident fund system run by EPFO. Out of the employer's 12% PF contribution, 8.33% of wages up to the wage ceiling goes to the pension fund for EPS members, and the rest goes to the employee's EPF account. EPS pays a monthly pension after retirement, and pensions to the family on death.
Is EPS deducted from salary?
No. The employee's 12% contribution goes entirely to the EPF account. EPS is funded from the employer's 12% share (8.33% of wages up to the ceiling, now a maximum of 2,083 rupees a month) and a 1.16% contribution from the Central Government. It appears on payslips only as part of the employer's contribution, if at all.
Who is eligible for EPS?
An EPF member is an EPS member if their wages are within the wage ceiling, now 25,000 rupees a month from 17 September 2026. Members who joined on or after 1 September 2014 with wages above the then ceiling of 15,000 rupees were kept out of EPS, but from 17 September 2026 such members with wages at or below 25,000 rupees become eligible. A monthly pension needs at least 10 years of eligible service.
What is the EPS full form?
In payroll and PF, EPS stands for Employees' Pension Scheme. In finance, EPS also stands for earnings per share, and in construction it means expanded polystyrene; those meanings are unrelated to the pension scheme.
What happens to EPS if I leave before 10 years?
If your eligible service is less than 10 years when you leave, you can claim a withdrawal benefit, a lump sum based on your service and wages, or take a scheme certificate so that the service is counted towards pension in a future job. If you join another PF-covered employer, the service continues on the same UAN.
What is the minimum EPS pension?
The minimum pension under the scheme is 1,000 rupees a month, a level that has applied since 2014 and continues under the Employees' Pension Scheme, 2026.
Position as of 15 November 2026, after the Employees' Pension Scheme, 2026 and the ₹25,000 wage ceiling from 17 September 2026. Pension formula details, early and deferred pension rates and the treatment of the higher ceiling in pensionable salary should be confirmed against EPFO's current guidance (EPFO). General information, not financial or legal advice.