What is the Difference Between EPF and EPS?

What is EPF (Employee Provident Fund) and How Does it Work?

Who is Eligible for EPF?

What is EPS (Employee Pension Scheme) and How Does it Work?

Who is Eligible for EPS?

Difference Between EPF vs EPS

Below are key differences between the Employee Provident Fund and the Employee Pension Scheme.

Point of Difference EPF (Employee Provident Fund) EPS (Employee Pension Scheme)
Applicability EPF applies to all organisations where the number of employees exceeds 20. Employee Pension Scheme applies to those persons who are members of EPFO (Employee Provident Fund Organisation). Moreover, they contribute to the EPS account.
Eligible Employees It is compulsory for salaried employees earning up to ₹15,000. Moreover, employees with a salary of more than ₹15,000 can contribute voluntarily. Employees whose salary + dearness allowance is up to ₹15,000.
Contribution of an Employee The contribution of an employee is 12% of the employee's basic salary and dearness allowance Nil
Contribution of an Employer An employer also contributes 12%. However, only 3.67% of the employer's contribution goes to EPF. The rest is contributed to the Employee Pension Scheme. 8.33% of the basic salary and the dearness allowance.
Limitation on Contributions The upper limit of the contribution is 12% of ₹15,000 per month. The contribution is limited to 8.33% of the salary up to ₹15,000.
Minimum or Maximum Limit on Deposit The contribution is fixed at 12% of the salary. Same as above
Age of Withdrawal You can withdraw after 58 years of age or if you have been unemployed for a continuous period of more than 2 months. You will receive the pension after 58 years of age.
Interest Rate The interest rate is calculated every month and paid at the end of the financial year. The Government fixes it, and it is reviewed regularly. There is no interest rate applied.
Withdrawal Withdrawal from the account can occur after 58 years or if unemployed for two months. Pension is received only after 58 years of age.
Premature Withdrawal Partial withdrawal is allowed in certain cases, such as weddings, children's education, loan repayment, unemployment, etc. Moreover, the full EPF balance can be withdrawn. An early pension can be received after 50 years of age. Moreover, you can withdraw a lump sum amount prematurely if you attain 58 years of age or if the service is completed in less than ten years. The amount that can be withdrawn depends on the years of service.
Financial Benefits Full amount + interest can be withdrawn after retirement. EPS pays a lifelong pension. If the member dies, his nominee will be paid the pension.
Tax Benefit Deduction of up to ₹1.5 lakh of employee contribution. No tax deduction Is allowed as employee contribution is NIL.
Tax Applicable The interest you receive from EPF is tax-exempt. However, tax is payable on any contributions greater than ₹2.5 lakhs. If you withdraw the balance amount from EPF before 5 years, a 10% TDS will be deducted. The pension and the lump sum amount will be taxable when you receive the pension. 

What are the Benefits of EPF?

What are the Benefits of EPS?

Calculation of EPF

Calculation of EPS

FAQs about Difference between EPF and EPS