EPF and EPS – The government designed the Employees’ Provident Fund (EPF) scheme to help employees build a retirement corpus. The Employees’ Provident Fund Organisation (EPFO) manages the scheme, which applies to organizations with 20 or more employees. Under the scheme, both the employer and employee contribute 12% of the employee’s salary (basic + DA) every month.
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The government designed the Employees’ Pension Scheme (EPS) to provide financial security to employees after retirement. The EPFO manages the scheme, and employers fund it through their contributions.
| Feature | EPF (Employees’ Provident Fund) | EPS (Employees’ Pension Scheme) |
| Purpose | Retirement savings scheme | Pension scheme for financial security after retirement |
| Contribution | Employee: 12% of basic salary; Employer: 12% of basic salary | Employer: 8.33% of basic salary (up to Rs. 1,250 per month) |
| Managed By | Employees’ Provident Fund Organisation (EPFO) | Employees’ Provident Fund Organisation (EPFO) |
| Interest Earnings | Earns interest annually | No interest earnings |
| Withdrawal Conditions | Can be withdrawn fully or partially before retirement | Can only be withdrawn if the service is less than 10 years |
| Tax Benefits | Eligible for tax deductions under Section 80C | Pension is taxable upon withdrawal |
| Pension Benefits | No pension benefits | Provides a pension post-retirement |
| UAN Linkage | Yes | Yes |
EPF and EPS work together and complement each other to provide financial security for employees after retirement. While EPF focuses on savings with interest earnings, EPS ensures a lifelong pension to those who have completed 10 years of service.
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The government offers the EPF and EPS schemes as essential retirement benefits to salaried employees. While EPF helps employees accumulate a retirement corpus with interest earnings, EPS ensures a steady pension after retirement. Employees should be aware of their contributions, withdrawal options, and pension benefits to make informed financial decisions.
If you have completed less than 10 years of service, you can withdraw the EPS balance by submitting Form 10C. Otherwise, the amount remains in the EPS account until you reach 58 years.
EPS does not earn any interest as it is meant solely for pension disbursement after retirement.
The EPS pension amount is calculated using the formula: (Pensionable Salary × Years of Service) / 70.</span>&amp;amp;amp;lt;/p>
No, the maximum contribution to EPS is capped at 8.33% of Rs. 15,000 (Rs. 1,250 per month).
Your EPF balance is transferred to your new employer’s account using the Universal Account Number (UAN).&amp;amp;amp;lt;/span&gt;</span>
Yes, EPF can be partially or fully withdrawn before retirement for specific reasons like medical emergencies, home loan repayment, and higher education.
Yes, pension received under EPS is taxable as per the individual’s income tax slab.
You can check your EPF balance through the EPFO portal, UMANG app, SMS, or by calling EPFO customer care. EPS details are available through the EPF account statement.
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