EPS Pension Calculator: Age 32; basic salary Rs 22,000; pensionable service 26 years; what will be your monthly pension at retirement?
EPS Pension Calculator: A private sector employee with an Employees' Provident Fund (EPF) account becomes eligible for Employees' Pension Scheme (EPS) on completion of 10 years of service. The pension is calculated on the basis of the pensionable salary and service.
EPS Pension Calculator: Employees' Provident Fund (EPF) is a popular retirement scheme where private sector employees can contribute monthly to generate a retirement fund. While they become eligible for an EPF monthly contribution on a minimum basic salary of Rs 15,000, on completing 10 years of service, they become eligible to get monthly pension under the Employees' Pension Scheme (EPS). The scheme can be used to get monthly income at the retirement age of 58 years or under specific circumstances. Know what EPS is and what a 32-year-old with a pensionable salary of Rs 22,000 and pensionable service years of 26 years will get in monthly pension post retirement.
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What is EPS pension?
Employees' Provident Fund Organisation (EPFO), which also runs the EPF scheme, started the Employees' Pension Scheme in November 1995. The scheme was aimed at providing monthly pension to EPF account holders.
Who contributes to EPS?
Before knowing it, let's see how the process of an EPF account works. A maximum amount of 12 per cent of the basic salary of a private sector employee is deposited to their EPF account. Now, the employer also matches the same amount and contributes.
Who contributes to EPS?
But not all contributions from the employer's side go to the employee's EPF account. Out of a total of 12 per cent, 8.33 per cent is deposited to the employees' EPS account. The employee gets fixed interest on the EPS contribution and can withdraw it on a monthly basis post retirement.
When can one withdraw EPS pension?
The basic condition is at the retirement age of 58 years. But it is evident that all private sector employees will work till 58. So, the second condition is on the completion of 10 years of service.
Can early EPS pension be got?
The early age to get pension is 50 years.
Is lump sum withdrawal from EPS possible?
Yes, the EPS account holder can withdraw a lump sum amount from their account.
Are EPS withdrawals tax-exempt?
Pension and the lump sum EPS withdrawal are taxable.
Can one get EPS pension at increased rate?
If an EPS account holder defers their pension for 2 years, they can get an extra 4 per cent pension.
Will employee get tax benefit on EPS deposits?
Since the EPS deposit is done by the employer, the employee doesn't get any tax benefit unlike they get on EPF deposits under Section 80C of the Income Tax Act, 1961.
How will EPS pension be calculated?
The basic salary and dearness allowance (DA) of an individual are taken into account to calculate the EPS pension.
Is there ceiling to EPS pension?
The minimum monthly EPS pension for an EPS account holder is Rs 1,000, while the maximum is Rs 7,500.
Is there ceiling to pensionable salary?
The government has put a ceiling of Rs 15,000 for pensionable salary. It means irrespective of an EPS account holder's monthly basic salary, the government will provide the monthly EPS pension on a Rs 15,000 basic salary.
What is formula to calculate EPS pension?
EPS pension = (pensionable salary x pensionable service)/70
Here, the pensionable salary is the average salary of last 60 months.
EPS pension calculation
For a 32-year-old with pensionable salary of Rs 22,000 and pensionable service of 26 years, the EPS pension will be = Rs 15,000X26/70= Rs 5,571.42