EPF vs EPS: Contribution, Savings, Pension and Withdrawal Rules

PF contributions are expected to rise by 12.4%, reaching ₹2.99 lakh crore in 2026–27. Within this, the EPS contribution for 2026–27 is estimated at ₹76,519.21 crore, highlighting the scale of pension-linked benefits under the PF system. 

For employees, PF may appear as a single deduction on the salary slip, but it is split into EPF and EPS, with each serving a different purpose. In this blog, we will explain EPF vs EPS, including contribution division and withdrawal rules.

What Is EPF? 

The full form of EPF is Employee Provident Fund. It is a retirement savings scheme for salaried employees, in which both the employee and the employer contribute a fixed portion of salary each month.

The scheme is managed by the Employees’ Provident Fund Organisation (EPFO) and helps build a long-term retirement corpus. It also allows access to funds for certain approved needs during employment, subject to rules. 

What are the Features of EPF?

EPF includes mandatory monthly contributions of 12% from both the employer and the employee, tax-free interest, and maturity at 58 years.

Here are the key features of EPF in detail:

• Salary-Linked Contribution: Contributions are calculated as a percentage of salary, which helps create a disciplined savings habit over time.
• Interest on Balance: The EPF balance earns annual interest. For FY 2025–26, the interest rate is 8.25%.
• Partial Withdrawal Facility: Members can withdraw part of their balance for specific purposes such as medical treatment, home purchase, or education, subject to eligibility conditions.
• Portable Account: The account can be transferred when an employee changes jobs, which helps maintain continuity in retirement savings.
• Tax Benefits: EPF offers tax benefits under the Exempt-Exempt-Exempt framework. Contributions of up to ₹1.5 lakh may qualify for deduction under Section 80C. Interest and withdrawals after 5 years of continuous service are generally tax-exempt.

Calculate your future PF savings instantly with our EPF Calculator and plan your retirement smarter.

What Is EPS? 

The full form of EPS is Employees’ Pension Scheme. It is a pension scheme under the EPFO system that helps provide eligible employees with a monthly pension after retirement.

Unlike EPF, EPS is not meant to create a lump sum savings corpus. It is designed to provide pension support based on factors such as years of service and the rules under EPS 1995.

What are the Features of EPS?

EPS includes a mandatory employer contribution, family/disability benefits, and ensuring post-retirement security. 

Here are the key features of EPS detail:

• Funded Through Employer Contribution: EPS is funded by a portion of the employer’s PF contribution, with the employee not contributing directly.
• Monthly Pension Benefit: The scheme provides pension benefits after retirement, subject to eligibility criteria.
• Family Benefit Provision: In certain cases, pension benefits may also be available to the member’s family after death.
• Service-Based Eligibility: Benefits depend on pensionable service and the conditions laid down under the scheme.
• Administered by EPFO: EPS is managed by the Employees’ Provident Fund Organisation as part of the PF structure.
• No Investment Choice: Members do not choose how their money is invested, as EPS is a pension scheme rather than a market-linked account.
• Governed by EPS 1995: Pension, withdrawal, and eligibility rules are governed by the Employees’ Pension Scheme, 1995.

EPF and EPS Contribution Structure (Monthly)

The monthly PF contribution is divided between EPF and EPS in a fixed way:

Component	Details
Employee Contribution	12% of the basic salary + DA is deducted from the employee’s salary and goes to EPF
Employer Contribution	12% of basic salary + DA is contributed by the employer and split between EPF and EPS
EPF Share	3.67% goes to EPF
EPS Share	8.33% goes to EPS
Mandatory Wage Ceiling	This contribution structure generally applies where basic salary + DA is up to ₹15,000

Note: If basic pay exceeds ₹15,000, the employer may limit the pension contribution calculation to ₹15,000, thereby capping the EPS-linked portion accordingly.

What Is the Difference Between EPF and EPS? 

The main difference between EPF and EPS is that EPF builds an interest-earning retirement corpus, while EPS supports pension benefits and does not earn interest. 

Basis	EPF	EPS
Contribution	12% employee + 3.67% employer	8.33% from the employer’s share
Interest	Earns 8.25% interest (FY 2025–26)	No interest
Eligibility	Applicable to eligible salaried employees under EPF rules	Generally applies where salary + DA is up to ₹15,000 under EPS rules
Withdrawal of Funds	Full withdrawal is generally allowed after 58 years of age or if unemployed for a continuous period of 60 days or more	Pension is generally payable after 58 years of age
Premature Withdrawal	Partial withdrawal is allowed for specific needs such as marriage, education of children, loan repayment, unemployment, or medical reasons, subject to conditions	Early pension can start after 50 years; lump sum withdrawal may be allowed if service is less than 10 years
Premature Withdrawal Amount	Full EPF balance can be withdrawn as per applicable rules	Withdrawal amount depends on years of service
Withdrawal Tenure	Withdrawals after 5 years of continuous service are generally tax-free within applicable rules	Lump sum withdrawal is generally allowed only if service is below 10 years
Tax Treatment	Tax-free within applicable limits	Pension is taxable as income
80C Deduction	Deduction allowed on up to ₹1.5 lakh of employee contribution	No deduction, since there is no direct employee contribution

Are EPF and EPS Mandatory?

EPF is generally mandatory for eligible salaried employees working in establishments covered under the EPF Act. Once an employee is covered under EPF, EPS also becomes part of the PF structure, subject to the applicable scheme rules.

This means eligible employees do not choose EPF and EPS separately. If PF applies to the employee, the contribution split between EPF and EPS is determined automatically in accordance with the rules.

Can You Withdraw EPF and EPS?

Yes, you can withdraw both EPF and EPS via the EPFO UAN or the Unified Portal, but the rules differ. EPF allows full or partial withdrawal under specific conditions, while EPS depends mainly on your years of service. 

EPF Withdrawal: Full withdrawal is generally allowed on retirement (after 58 years of age) or after 2 months of unemployment. 

Partial withdrawals are allowed for specific purposes, such as medical treatment, housing, education, or marriage. 

EPS Withdrawal: 

• Less than 10 years of service: You can withdraw the full pension amount using the Composite Claim Form (Aadhaar).
• More than 10 years of service: You are not allowed to withdraw the principal; you must receive a monthly pension upon turning 58.

New Rules for 2026: For job loss, 75% of PF is accessible immediately, and 25% after one year of unemployment.

What Are the Steps to Withdraw PF/Pension? 

To withdraw PF/pension, check your eligibility and keep your documents, including your UAN, Aadhar, Bank Details, and KYC documents, ready.

Then, follow these steps:

Step 1: Log in to the EPFO member portal.

Step 2: Choose the correct claim form or online claim option.

• Form 19 for EPF withdrawal
• Form 10C for EPS withdrawal benefit / Scheme Certificate
• Form 10D for monthly pension claim

Step 3: Fill in the required details and verify the claim.

Step 4: Submit the request online.

Step 5: Track the claim status on the EPFO portal until settlement or pension approval. 

Step 6: Once approved, the pension is credited to your registered bank account. 

Track your PF claim status online and stay updated on your withdrawal progress in real time.

Can EPS Be Transferred?

EPS does not get transferred as a separate cash balance like EPF. Instead, the pensionable service record continues when you move to another EPF-covered job and transfer your PF account.

Note: What carries forward is your service record, not money that you can transfer separately.

Is EPS Withdrawal Taxable? 

The tax treatment of EPS withdrawal depends on how the pension is received:

• If the amount is received as a monthly pension, it is treated as salary income and is generally taxable. 
• If it is received as a lump sum, it is treated as a commuted pension, and the taxability depends on the employee type and whether gratuity is received.

Type of receipt	Tax treatment
Monthly pension (uncommuted pension)	Fully taxable as salary
Lump sum pension for government employees	Fully exempt
Lump sum pension for non-government employees who also receive gratuity	Up to one-third of the full commuted value may be exempt
Lump sum pension for non-government employees who do not receive gratuity	Up to one-half of the full commuted value may be exempt

Note: An exemption in respect of commuted pension is available under both tax regimes. 

Are EPFO and EPS 95 the Same?

No, EPFO and EPS 95 are not the same. 

EPFO is the organisation that manages provident fund-related schemes in India, while EPS 95 is the Employees’ Pension Scheme, 1995, which provides pension benefits to eligible members.

EPFO is the administrator, and EPS 95 is one of the schemes managed by EPFO. 

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How Can You Raise an EPF Complaint or Query? 

If employees face any EPF-related issue, they can raise a complaint online through the EPFiGMS portal, contact the 1800-118-005 helpline between 9:15 AM and 5:45 PM, or call 14470. For urgent matters, queries can also be sent to ‘employeefeedback@epfindia.gov.in.’ Keep your UAN and PF account details ready for faster resolution. 

EPF vs EPS | FAQs

Source: EPFO

Disclaimer: This content is for education and awareness purposes only and should not be considered investment advice or a recommendation. Investments in securities markets are subject to market risks. Read all the related documents carefully before investing.