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  5. EPS 2026: Govt notifies new rule capping its pension contribution at ₹15,000 wages; see details

Personal Finance News

EPS 2026: Govt notifies new rule capping its pension contribution at ₹15,000 wages; see details

rajeev kumar
By Rajeev Kumar

2 min read | Updated on October 23, 2026, 14:01 IST

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SUMMARY

Under EPFO rules, both employer and employee contribute 12% of Basic wages (+ Dearness allowance, if application) each towards EPFO schemes, while the Government also contributes a fixed amount to EPS.

eps pension government contribution rule

The new rule was notified on October 15, 2026. | Image: Shutterstock

Even as the wages to be considered for employees' and employers' EPFO contributions have been officially increased from ₹15,000 to ₹25,000, the government's contribution to the scheme will continue to be 1.16% of the previous wage limit, which is ₹15,000. In other words, there will be no increase in the government's EPS contribution even as the statutory EPFO wages have been hiked by ₹10,000.
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To ensure that the Government's contribution under EPS doesn't increase after EPFO wage hike, the Ministry of Labour and Employment recently notified an amendment to the Employees Pension Scheme (EPS) Rules 2026, which now says that the Central Government's contribution will be limited to wages up to ₹15,000.

Prior to the amendment, the official rule had no such wage restriction as it said, "The Central Government shall contribute to the Scheme at the rate of one and sixteen hundredths per cent. of the pay of the members of the Employees' Pension Scheme, limited to such sum as may be specified by the Central Government."

Further, it said, "Provided that where the wage of the member exceeds the wage ceiling notified by the Central Government, the contribution payable by the employer and the Central Government shall be limited to the amount payable on wages up to such wage ceiling :"

As per the amendment notified by the ministry, the new rule will now read as: "The Central Government shall contribute to the Scheme at the rate of one and sixteen hundredths per cent. of the pay of the members of the Employees' Pension Scheme, limited to wages upto rupees fifteen thousand (₹15,000/-) per month."

Under EPFO rules, both employer and employee contribute 12% of Basic wages (+ Dearness allowance, if application) each towards EPFO schemes. While employees' 12% go towards Employees' Provident Fund (EPF), the employers' 12% share is split into both EPF and EPS at 3.67% and 8.33% respectively. The Government also contributes 1.16% of its own fund towards employees' EPS accounts.

About The Author

rajeev kumar
Rajeev Kumar is a Deputy Editor at Upstox, and covers personal finance stories. In over 11 years as a journalist, he has written over 2,000 articles on topics like income tax, mutual funds, credit cards, insurance, investing, savings, and pension. He has previously worked with organisations like 1% Club, The Financial Express, Zee Business and Hindustan Times.

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