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EPS pension formula for private employees: How much monthly pension will you get after 35 years of job on maximum ₹15000 average salary.

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Pension in Private Job: There is a facility of EPS (Employee Pension Scheme) for employees working in the organized sector. Employees Provident Fund Organization (EPFO) runs this pension scheme for the social security of private sector employees after their retirement.


Pension in Private Job: People working in private jobs usually worry that there is no provision for pension after retirement. That is to say, even after working in a company for years, there remains a doubt as to whether old age will pass smoothly or not. However, there is the facility of EPS (Employee Pension Scheme) for employees working in the organized sector. Employees Provident Fund Organization (EPFO) runs this pension scheme for the social security of private sector employees after their retirement. However, currently the limit of maximum salary (Basic + DA) and job is fixed in this scheme. Let us understand with simple calculation that you can get a pension after retirement from a private job.

What are the current rules of pension in EPS?

The maximum average salary (Basic Salary + DA) for EPS is Rs 15,000. Also, the maximum service for pension is 35 years. After the employee turns 58 years of age, he is entitled to pension. Know here that the EPS pension is Rs 1,000. To get pension, it is necessary to remain in regular job for at least 10 years. There is an option to take pension after 50 years and even before the age of 58. However, if you take pension earlier, you will get reduced pension. For this, Form 10D will have to be filled. On the death of the employee, the family gets pension. If the service history is less than 10 years, then they will get the option to withdraw the pension amount at the age of 58 years.

EPFO deposits 12 percent of the employee’s basic salary + DA in the EPF account every month. The employer’s contribution is also the same. Out of this, 8.33% amount goes to the employee’s pension fund (EPS Fund) and the remaining 3.67% amount goes to the PF account.

12 percent of the employee’s basic salary and dearness allowance is deposited in the Employee Provident Fund (EPF) account. But, the employer’s amount of 12 percent is deposited in two parts. Out of the 12 percent contribution of the employer, 8.33 percent amount is deposited in the employee pension account and the remaining 3.67 percent amount goes to the EPF account.

EPS Formula: Understand the pension formula

There is an easy formula to calculate how much pension you will get in EPS. EPS = Average Salary x Pensionable Service/ 70. Here average salary means basic salary + DA. Which is calculated on the basis of last 12 months. Maximum pensionable service is 35 years. Now understand the pension from EPS calculation based on maximum contribution and years of service – 15000 x35 / 70 = Rs 7,500 per month. This means that according to the existing rules, people doing private jobs will get a maximum pension of Rs 7500 thousand and minimum Rs 1,000 on retirement through EPS.

Remember here that this formula of EPS will be applicable to the employees working in the organized sector after 15 November 1995. There are different rules for earlier employees. On the other hand, there is a continuous demand from employee organizations that in view of the current wage structure and inflation rate, the maximum limit of average salary for pension should be increased.

Pravesh Maurya
Pravesh Maurya
Pravesh Maurya, has 5 years of experience in writing Finance Content, Entertainment news, Cricket and more. He has done BA in English. He loves to Play Sports and read books in free time. In case of any complain or feedback, please contact me @ businessleaguein@gmail.com
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