What is EPS? Employees' Pension Scheme

Definition

The Employees' Pension Scheme is the pension scheme run by EPFO alongside the Employees' Provident Fund. The employee does not contribute to it separately: 8.33% of PF wages is carved out of the employer's 12% PF contribution and credited to EPS, and the rest of the employer's share goes to EPF. The Central Government adds 1.16% on wages up to ₹15,000.

How it works

• Employer EPS = 8.33% of PF wages up to the EPS wage ceiling; employer EPF = the employer's 12% minus EPS.
• From 17 September 2026 NeevHR applies the ₹25,000 PF wage ceiling to EPS as well, so the most diverted to EPS is ₹2,083 a month. Before that date the ceiling was ₹15,000 (at most ₹1,250). Confirm the EPS basis with your CA, as commentary differs.
• EPS membership: members who joined above the ceiling were outside EPS; G.S.R. 847(E) brings in those within the new ceiling when it was notified.
• A member with 10 years of eligible service can draw a monthly pension from age 58; with less, a withdrawal benefit is paid on leaving.

Why HR and payroll teams care

The EPS and EPF split changes what goes into each account in the ECR, and the wrong ceiling produces a mismatch EPFO will flag. It also decides whether a joiner is an EPS member at all.

Example