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EPF vs EPS is about one contribution split two ways. The employer's 12% is divided between the Employees' Provident Fund and the Employees' Pension Scheme, on different wage bases.
Check before you rely on thisCheck the current EPFO position on the ₹15,000 wage ceiling, the 8.33% EPS rate, higher-pension options and EPS withdrawal and eligibility rules before relying on these figures.
01
Under the Employees' Provident Funds and Miscellaneous Provisions Act 1952, the employee contributes 12% of PF wages (basic plus dearness allowance) and the employer contributes 12%. All of the employee's share goes to the provident fund.
The employer's share is split. 8.33% of PF wages, calculated on wages up to the ₹15,000 ceiling, goes to the Employees' Pension Scheme 1995, so the pension share is at most ₹1,250 a month. The rest of the employer's 12% goes to the provident fund.
02
| Factor | EPF | EPS |
|---|---|---|
| What it is | A savings account that earns interest | A pension scheme |
| Employee contribution | 12% of PF wages | None |
| Employer contribution | 12% minus the EPS share | 8.33% of wages up to ₹15,000, at most ₹1,250 a month |
| How the benefit is held | Individual account balance | Pooled scheme; benefit worked out by formula |
| What the member receives | Balance with interest, on withdrawal or retirement | Monthly pension or withdrawal benefit, subject to scheme conditions |
Watch for itThe pension share is worked out on the capped wage even when the employer pays PF on full basic. Employer contribution above the cap goes to the provident fund, not the pension.
03
Basic plus DA of ₹25,000, with the employer contributing on the ₹15,000 ceiling: the employer's 12% is ₹1,800. The pension share is 8.33% of ₹15,000, ₹1,250. The provident fund receives the remaining ₹550 from the employer, plus the employee's ₹1,800.
The same employee with the employer contributing on full basic: the employer's 12% is ₹3,000. The pension share is still ₹1,250. The provident fund receives ₹1,750 from the employer and ₹3,000 from the employee.
04
On top of the 12%, the employer pays EDLI (insurance) at 0.5% of wages up to ₹15,000, at most ₹75 a month, and EPF administration charges of 0.5% of PF wages. These are employer costs, not credits to the employee's account.
Withdrawal and pension eligibility under EPS depend on years of service and age under the scheme's rules, and work differently from EPF withdrawals. Check the current EPFO rules.
Because part of the employer's 12% goes to the pension scheme, which is not shown as a balance in the provident fund account.
Not beyond the cap in the standard case. The pension share is calculated on wages up to ₹15,000, so it stops at ₹1,250 a month.
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