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EPS

Investment

Employees' Pension Scheme

A government-run pension scheme in India funded by a portion of the employer's EPF contribution, providing a monthly pension after retirement to eligible employees.

Written by · Reviewed by the thecalcu.com team · Last updated 8 August 2026

What is EPS?

EPS is the pension arm of India's Employees' Provident Fund system, providing a monthly pension after retirement to employees who complete at least 10 years of eligible service. Unlike your EPF balance, which you can withdraw as a lump sum, EPS pays out as a fixed monthly pension for life.

The employer's 12% EPF contribution is split: 8.33% of pensionable salary (subject to a wage ceiling) goes into the EPS pool, and the remainder goes to your EPF account. Your own 12% contribution goes entirely to EPF, none of it touches EPS. The EPF Calculator shows how the employer contribution divides between the two.

Formula

Monthly Pension = (Pensionable Salary × Pensionable Service) / 70

Pensionable salary is the average monthly salary over the last several years of service, capped at a government-set ceiling regardless of your actual pay.

Worked Example

An employee retires with a pensionable salary of ₹15,000 (the ceiling) and 25 years of pensionable service.

  • Monthly pension: (₹15,000 × 25) / 70 = ₹5,357 per month

Because pensionable salary is capped, an employee earning ₹80,000 a month gets the same EPS pension calculation as one earning ₹15,000, assuming equal years of service, the cap limits the pension regardless of actual income.

Key Things to Know

  • 10 years of service is the eligibility threshold. Fall short of that and you can withdraw your EPS contribution as a lump sum instead of receiving a pension, subject to specific withdrawal rules.
  • Pensionable salary is capped, unlike your actual salary. High earners don't get a proportionally higher EPS pension, the ceiling limits the calculation regardless of real income.
  • Early pension is available from age 50, at a discount. Opting in before 58 reduces your monthly pension amount by roughly 4% for each year short of 58.
  • EPS is entirely employer-funded. Your own EPF contribution never touches the pension pool, only the employer's share does.
  • UAN carries your EPS service record across employers. Job changes don't reset your years of eligible service as long as accounts are properly linked.

Related Calculators

EPF Calculator →Calculate your retirement corpus using the EPF Calculator by thecalcu. Estimate total PF balance with employee contributions, salary hikes & 8.25% interest.

Related Terms

UANUniversal Account Number

Frequently Asked Questions

Is EPS the same as EPF?

No, they're related but different accounts. EPF is your provident fund savings, built from both your and your employer's contributions, while EPS is a separate pension pool funded only from a portion of the employer's share, capped at 8.33% of pensionable salary.

How much of my EPF contribution goes to EPS?

None of your own contribution goes to EPS, it's entirely funded from the employer's side. Of the employer's 12% contribution, 8.33% (capped at a pensionable salary ceiling) is diverted to EPS, and the rest goes to your EPF account.

When can I start receiving an EPS pension?

Generally at age 58, provided you've completed at least 10 years of eligible service. You can also opt for an early, reduced pension starting at age 50.

What happens to EPS if I switch jobs before 10 years of service?

You can transfer your EPS service record to your new employer using your [UAN](/glossary/uan/), and the years combine across jobs. If you withdraw instead of transferring, you may lose pension eligibility if total service falls short of 10 years.

Is the EPS pension amount fixed or does it grow with my salary?

It's calculated using a formula based on your average pensionable salary over the last several years of service and total years of service, not your final salary alone, and it's capped regardless of how high your actual salary grows.