The Employees’ Provident Fund Organisation (EPFO) has clarified the eligibility conditions for membership of the Employees’ Pension Scheme (EPS), highlighting the role of monthly wages and previous membership in determining whether an employee qualifies for pension contributions.
The clarification comes after the monthly wage limit for mandatory EPFO coverage was raised from ₹15,000 to ₹25,000, effective September 17, 2026. According to the Ministry of Labour and Employment, the change is expected to extend statutory social security benefits to more than 51 lakh additional employees, particularly those earning between ₹15,000 and ₹25,000 per month who were previously outside mandatory coverage.
In a post on X dated October 11, 2026, EPFO explained that employees earning ₹25,000 or less may be required to join EPS, subject to the scheme’s eligibility conditions. Employees earning above ₹25,000 who were not previously EPS members are not eligible to join under the conditions outlined in the post.
EPFO Explains EPS Membership Eligibility
EPFO has highlighted two key conditions for determining eligibility for the Employees’ Pension Scheme.
Employees whose monthly wages are ₹25,000 or less are required to become EPS members if they meet the applicable eligibility criteria. In such cases, pension contributions are deducted according to the scheme rules.
For employees earning more than ₹25,000 per month, previous membership becomes an important factor. According to EPFO’s clarification, an employee earning above this limit who was not previously an EPS member is not eligible to join the scheme, and EPS contributions are not deducted.
This means that salary alone does not determine eligibility in every situation. An employee’s membership history and the applicable EPF and EPS provisions must also be considered.
How Employer Contributions Are Divided Between EPF and EPS
The Employees’ Provident Fund (EPF) and the Employees’ Pension Scheme (EPS) serve different purposes within the retirement benefits framework. EPF helps build retirement savings, while EPS provides pension benefits to eligible members.
Under the standard contribution structure, the employer contributes 12% of eligible wages towards the employee’s retirement benefits. Of this, 8.33% of pensionable wages is allocated to EPS, subject to the applicable wage ceiling and scheme provisions. The remaining amount is credited to EPF.
For example, if the applicable pensionable wage is ₹25,000 per month, the employer’s 12% contribution would amount to ₹3,000. Based on an EPS allocation of 8.33% of ₹25,000, the pension contribution would be ₹2,082.50, leaving ₹917.50 for EPF.
These figures illustrate the contribution split at the stated wage level. The actual amount allocated to each scheme depends on the employee’s eligibility and the rules applicable to their membership.
What Should Employees Do If EPS Contributions Are Not Deducted?
Employees who believe their EPS contributions have been handled incorrectly should first contact their employer to verify their membership status and contribution records.
This applies to employees earning ₹25,000 or less who believe eligible pension contributions have not been deducted, as well as those earning above the limit who believe contributions have been withheld despite their ineligibility for membership.
Before raising a complaint, employees should check their previous EPS membership and confirm the eligibility conditions applicable to their employment.
If the matter remains unresolved after contacting the employer, employees can submit a grievance through the EPF i-Grievance Management System (EPFiGMS) portal.
Employees should also refer to official EPFO notifications and scheme provisions for confirmation of their individual eligibility and contribution requirements.
Disclaimer: This article is intended for general informational and educational purposes only. EPS membership eligibility and contribution requirements depend on applicable rules, wage definitions and an employee’s membership history. The examples provided are illustrative and should not be treated as confirmation of individual eligibility. Employees should consult EPFO, their employer or a qualified professional for clarification on their specific circumstances and the latest applicable regulations.