EPFO Pension: Employees working in the private sector get pension under EPFO . For this, they have to contribute to PF. PF money is deposited in two parts. One part is deducted from the employee’s salary and the other part is deposited by the employer. One part of the employer goes to EPS i.e. Employee Pension Scheme. However, it is fixed how much PF can be deducted from your salary. Due to its fixed limit, less contribution is deposited in EPS, which has a direct impact on the pension.
Currently, the EPFO’s wage limit is 15,000 rupees. This means that regardless of your salary, PF deductions are made on a basic salary of 15,000 rupees. 12% of this is deducted and deposited into your PF account. The Supreme Court has directed the central government and the EPFO to increase this limit.
📌 Also Read: Budget Focuses on Old Tax Regime, Big Decision Expected on February 1st
In such a situation, a question arises: if the wage limit is increased to 30,000 rupees, how much monthly pension can private employees receive? Let’s find out.
What is the minimum and maximum pension under EPS now?
Currently, private employees receive a minimum pension of Rs 1,000 and a maximum of Rs 7,500 under the EPS. This means that if you meet the pension criteria, you can receive a maximum pension of Rs 7,500 under this scheme. An increase in this pension is also being considered. If the basic salary, or wage limit for PF, is raised to Rs 30,000, the pension could increase.
📌 Also Read: Business Idea - Forget the job! Earn big every month with this business
How is pension calculated?
The amount of pension received under EPFO is calculated through a formula.
EPF pension formula – Pensionable salary × Pensionable service / 70
📌 Also Read: Crypto Prices Today - Crypto Market Falls, But This Cryptocurrency Jumps 18%, Check Bitcoin and Ethereum Prices
Here, pensionable salary is the average of your last 60 months’ basic salary and dearness allowance (capped at Rs 15,000 for standard calculation), and pensionable service is your total years of contribution.
Currently, the maximum pensionable salary remains Rs 15,000, and the maximum number of years is 35. However, if the minimum wage limit is raised to Rs 30,000, the EPFO pension could increase. Under this formula, the maximum pension could be Rs 15,000, and the minimum pension could be Rs 4,285.
📌 Also Read: Business Idea - Women Can Start These Amazing Businesses, Big Profits with Low Investment
📌 Also Read: WhatsApp Chat Way Will Change, Rolling Out New Amazing Feature