What is Pension Contribution in EPF?

General
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Want to know what is pension contribution in epf statement?

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Pension contribution is the part of the employer’s EPF share that goes into the Employees’ Pension Scheme. This builds your retirement income. You do not pay this amount yourself. It comes entirely from the employer.

If your basic salary is up to ₹15,000 every month, your employer contributes 8.33% of the salary to EPS. The rest of their share stays in your EPF account.

For example, if your basic salary is ₹15,000, your employer puts ₹1,250 into your pension.

However, here are some points you must remember:

  • Pension contribution stops once you turn 58 or start receiving a pension.
  • If you joined EPF after 1 September 2014 with a salary above ₹15,000 and were not an existing member, no amount goes to EPS. In this case, your employer’s entire share goes to EPF.

In simple terms, pension contribution is your employer’s way of funding a monthly income for you after retirement.