Every month 8.33% of your employer's PF contribution quietly buys you a pension. Here is exactly how small — and how certain — that pension is.
Short answer: your EPFO pension is (pensionable salary × pensionable service) ÷ 70, where pensionable salary is your last 60 months' average capped at ₹15,000 and service is capped at 35 years (with 2 bonus years after 20). That caps the standard pension near ₹7,500 a month; the floor remains ₹1,000. In 2026 the scheme was re-notified as EPS 2026 — the formula, contributions and caps carried over unchanged.
EPS 2026 (successor to EPS-95) · Wage ceiling ₹15,000 · Minimum pension ₹1,000 — the proposed ₹7,500 minimum has not been notified · Indicative, as of August 2026
| Service (years) | Pensionable salary (capped) | Monthly pension |
|---|---|---|
| 10 | ₹15,000 | ₹2,143 |
| 20 (+2 bonus = 22) | ₹15,000 | ₹4,714 |
| 30 (+2 bonus = 32) | ₹15,000 | ₹6,857 |
| 33 (+2 bonus = 35, max) | ₹15,000 | ₹7,500 |
Three mechanics people miss: pensionable salary is the last 60 months' average of basic+DA, not your final month; partial years round (6+ months counts as a full year); and crossing 20 years of service adds 2 bonus years — making the 19th-to-20th year of service one of the most valuable years in the whole scheme.
Because the ₹15,000 wage ceiling froze in 2014. Whether your basic salary is ₹15,000 or ₹1,50,000, the formula sees ₹15,000 — your employer's 8.33% flows in on at most ₹1,250 a month. EPS is best understood not as your pension but as a small, inflation-naked, government-administered life annuity that comes free with EPF membership. Members who exercised the higher pension joint option (the 2023 window) are the exception: their pension computes on actual salary, and those elections carry into EPS 2026 unchanged.
The minimum pension has been ₹1,000 since September 2014. The long-running demand to raise it to ₹7,500 plus dearness allowance has produced committee recommendations and headlines, but no notification — and the EPS 2026 re-notification kept the floor at ₹1,000. Any article telling you the hike "is done" is ahead of the law. We will update this page the day a notification exists.
Pension starts at 58 via Form 10D (early pension from 50 at a 4%-per-year reduction). Under 10 years of service, there is no pension — you take a withdrawal benefit or a scheme certificate instead, and the 9-years-11-months resignation is the classic self-inflicted wound. On death, the widow/widower receives 50% of the pension (minimum ₹1,000), each of up to two children 25% until age 25, and orphans 75%. The family pension needs no fresh application beyond Form 10D with the death certificate.
Treat the EPS payout as covering one fixed bill — a utility, a medicine refill — and build the real income from the corpus: see the income ladders. And remember the pension is fully taxable as salary income; for most EPS-scale pensions the new regime's rebate makes that academic.
(Pensionable salary × pensionable service) ÷ 70 — salary being the last 60 months' average of basic+DA capped at ₹15,000, service capped at 35 years including 2 bonus years granted after 20 years.
About ₹7,500 a month under the standard route (₹15,000 × 35 ÷ 70). Only members who opted for the higher-pension route on actual salary can exceed it.
No. As of August 2026 the notified minimum remains ₹1,000; the ₹7,500 demand is a proposal, not law — and the EPS 2026 re-notification did not change the floor.
The scheme was re-issued under the new framework, but the formula, the 8.33% employer contribution, the ₹15,000 ceiling, the minimum pension and existing higher-pension elections all carried over unchanged.
Related: EPF Calculator · NPS exit rules · EPF withdrawal rules
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Written and checked by the PaisaSamajh editorial desk · Last reviewed: 24 August 2026 · How we check this →