EPS (Employees’ Pension Scheme): Eligibility & Pension Calculation
Last verified: June 2026, against EPFO procedures. Portal steps and numbers can change — confirm on the official EPFO member portal. General information, not financial advice.
The Employees’ Pension Scheme (EPS) is the part of your PF that funds a monthly pension after retirement. Many employees don’t realise a slice of their employer’s PF contribution goes here. Here is how it works.
How EPS is funded
Of the employer’s 12% PF contribution, 8.33% goes to EPS (the pension fund) and the rest to EPF. There is a wage ceiling on the EPS contribution, so the pension is based on a capped “pensionable salary”.
When you get the pension
- Eligibility: a minimum of 10 years of service (can be across jobs, as long as PF is transferred and the service is continuous under your UAN).
- Pension age: normally 58. You can take a reduced early pension from 50, or a higher pension by deferring up to 60.
How the pension is calculated
The broad formula is: monthly pension = (pensionable salary × pensionable service) ÷ 70. Because the pensionable salary is capped, the standard EPS pension is modest — treat it as one layer of retirement income, alongside NPS and your own investments.
Withdrawal vs pension
If you leave before 10 years of service, you can withdraw the EPS amount (or take a scheme certificate to carry the service forward). With 10+ years, you keep the pension entitlement — so transfer your PF on job changes to preserve continuous service.
Worked example
EPS pension = pensionable salary × years of service ÷ 70. With pensionable salary capped at ₹15,000 and 30 years of service, the pension is ₹15,000 × 30 ÷ 70 ≈ ₹6,430 a month from age 58. Service of 20 years or more gets a 2-year bonus in the calculation. The minimum pension is ₹1,000 a month.
Withdrawal vs pension
With less than 10 years of service you can withdraw the EPS amount using a scheme table; with 10 or more years you are entitled to a pension and should not take the withdrawal. Get a scheme certificate when changing jobs if there will be a gap, so service is not lost.
Reviewed October 2026.
FAQs
Is EPS pension taxable?
Yes, the monthly pension is taxed as income; standard deduction applies under both regimes.
What is EPS?
The Employees’ Pension Scheme — funded by 8.33% of the employer’s PF contribution — that pays a monthly pension after retirement.
How many years of service are needed for EPS pension?
A minimum of 10 years, with pension normally starting at age 58.
How is the pension calculated?
Roughly pensionable salary × pensionable service ÷ 70; the pensionable salary is capped, so the pension is modest.
