See how much goes into your provident fund each month. Your own 12% goes fully to EPF, but your employer's 12% is split between EPF and the EPS pension scheme.
Both you and your employer contribute 12% of basic salary plus dearness allowance.
Your entire contribution goes into EPF.
From the employer's share, 8.33% goes to the pension scheme — but only on wages up to the statutory ceiling of ₹15,000, so the pension share stops growing above that.
Whatever is left of the employer's 12% goes into EPF.
Employee share: 12% of (basic + DA)
Employer share: 12% of (basic + DA)
→ EPS (pension): 8.33%, capped at the ₹15,000 ceiling wage
→ EPF: Employer share − EPS
Why is the pension contribution capped?
The EPS contribution is worked out on a fixed limit of ₹15,000 in wages, so it stops at about ₹1,250 a month, no matter how high your salary is. The rest of the employer's 12% goes into EPF instead.
Is EPF interest taxable?
Interest on your own contributions above ₹2.5 lakh in a financial year is taxable. Below that amount, it stays tax-free. The rules are different if there is no employer contribution.
Can I contribute more than 12%?
Yes, through the Voluntary Provident Fund. The extra amount earns the same interest rate, but your employer does not have to match it.