BUSINESS
EPFO Pension: Can you get ₹12,500 per month after retirement? Understand EPS pension calculation now
If you're employed and contribute to PF, there's important news for you. The central government has raised the salary limit for mandatory coverage under the EPFO from ₹1,500 to ₹25,000 per month. This decision will allow more than 5.1 million employees to become eligible for the social security scheme. However, this change doesn't mean that every employee will receive a pension of ₹12,500 per month upon retirement.
What will be the benefit to employees by increasing the salary limit to Rs 25,000?
According to official information from the central government, the new salary limit has come into effect from September 17, 2026. As a result, eligible employees who were previously excluded from mandatory EPFO coverage due to salaries exceeding ₹15,000 will now also benefit from social security schemes like EPF, EPS, and EDLI. However, this requires meeting the relevant rules and eligibility requirements.
How can one actually receive a pension of ₹12,500?
Under EPS, pension is calculated based on the pensionable salary and eligible service period. The formula is to multiply the pensionable salary by the eligible service years and divide by 70. For example, if the pensionable salary is ₹25,000 and the eligible service is 35 years, the monthly pension would be ₹12,500. However, this is just an example calculation, and the actual pension will depend on applicable rules.
How much is the contribution to EPF and EPS?
As per the rules, out of the 12% contribution, 8.33% is deposited in EPS and the remaining 3.67% is deposited in EPF as per applicable conditions. Assuming the pensionable salary is Rs 25,000, the contribution to EPS is Rs 2,082.50.
Where to complain about EPS deductions? In case of a discrepancy between salary and EPS contribution, employees should first contact their company's HR department. If the issue remains unresolved, a complaint can be filed on the EPFO's official EPFiGMS complaint portal.
PC: Money control
