Payroll & statutory · Updated October 2026
Under the Employees’ Pension Scheme, your monthly pension is pensionable salary multiplied by pensionable service, divided by 70. Pensionable salary is the average of the wages on which EPS contribution was paid in the 60 months before you exit, and pensionable service is your years of EPS contribution, with a six-month rounding rule. Both are tracked by the EPFO against your UAN.
Pensionable salary. The scheme text averages pay drawn during the contributory period within the 60 months before exit. Wages are limited by the statutory ceiling, Rs 15,000 a month until recently. The Cabinet approved a rise to Rs 25,000 on 16 September 2026, announced from 17 September, but the matching EPS amendments were not confirmed when this was written, so check the notified figure. See the PF wage ceiling page for updates.
Pensionable service. Completed years of contribution. A leftover fraction of six months or more counts as a full year, and less than six months is dropped. If you retire at 58 with 20 or more years, two years of weightage are added.
| Member | Average salary | Service | Pension per month |
|---|---|---|---|
| A | Rs 15,000 | 28 years 4 months, rounds to 28, plus 2 weightage = 30 | 15,000 x 30 / 70 = Rs 6,429 |
| B | Rs 12,000 | 12 years 7 months, rounds to 13, no weightage | 12,000 x 13 / 70 = Rs 2,229 |
Pension starts at 58 after at least 10 years of service. Early pension is possible from 50, reduced by 4% for each year short of 58, so Member B drawing at 55 gets 12% less, about Rs 1,961. With under 10 years you take a withdrawal benefit instead. The minimum pension has stayed at Rs 1,000; a 2026 parliamentary committee asked for a review, but the Labour Ministry has said there is no immediate proposal.
On 4 November 2022 the Supreme Court allowed eligible members to seek pension on actual wages above the old ceiling. EPFO ran a joint-option and validation process, and in July 2026 the Labour Ministry told Parliament it was implementing the judgment in a time-bound way. For members in service, pension on higher wages is fixed when they claim after 58, so confirm status on the member portal.
Those forming PF wages, generally basic and dearness allowance, not full gross. Salary structure therefore moves the pension, and the 50% wage rule may also matter.
Because pensionable salary is capped, and the extra employer money goes into the provident fund balance instead. See PF contribution rate for the split.
Months with no contribution do not add to pensionable service, so long unpaid gaps can cost you years. Check the history in your PF passbook.
Against your UAN, which is why transferring service on a job change matters.
Estimate the EPF and EPS split for any salary in the PF Calculator.