The Employees' Pension Scheme (EPS) of the Employees' Provident Fund Organisation (EPFO) serves as a vital support system for achieving financial independence after retirement. However, with the wage ceiling for EPF coverage raised from ₹15,000 to ₹25,000, employees often wonder how much pension they would receive—and how to calculate it—based on their years of service (whether 10, 15, 20, or more).

According to EPF regulations, an employee must complete a minimum of 10 years of pensionable service to be eligible for a regular monthly pension. Let us examine the pension amount an employee would receive if their basic salary is ₹30,000 and they have completed 10 years of service.

Understanding the Calculation
According to the EPFO, the formula for the EPS pension is:
Monthly Pension = (Pensionable Salary × Pensionable Service) ÷ 70

*   Pensionable Salary: Based on the average salary of the last 60 months.
*   Pensionable Service: The total number of years of contribution to the EPS.

How much pension will accrue in 10 years?
If your pensionable salary is ₹30,000 and your contribution is based on your actual salary (which exceeds the ceiling limit), the pension calculation would be as follows:

For 10 years of service: (30,000 × 10) / 70 = ₹4,286

This means that after 10 years of service, you would receive a guaranteed monthly pension of approximately ₹4,286.

Coverage under EPF: The New Rule
Under the new rule, employees with a basic salary of up to ₹25,000 will now mandatorily fall under the ambit of the EPFO. If an individual's basic salary is ₹25,000, a 12% contribution will be deducted from their salary; this amount comes to ₹3,000. The employer will also make a matching contribution of ₹3,000. Employers are mandatorily required to comply with this rule. This will benefit employees at the time of retirement.

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