Confused About EPS Wage Calculation for EPF Challan? Let's Clarify Together

Please help me understand the correct calculation of EPS wage to prepare the EPF challan. Below are the two methods; please suggest which one is correct.

Suppose:

EPS contribution for the month of Jun-2016
Employee's Basic wage = 25000
Paid Days = 20

Calculation Method 1:

Basic Salary = 25000 * 20 / 30 = 16667
EPF wage = 16667
EPS wage = 15000

Calculation Method 2:

Basic Salary = 25000 * 20 / 30 = 16667
EPF wage = 16667
EPS wage = 15000 * 20 / 30 = 10000

Please suggest whether 10000 is the correct EPS wage or 15000 (in the above-mentioned case).

Thank you.

Hi,

If the salary is above 15000/-, then you can restrict the EPF and EPS to 15000/- only. There is no need to contribute on higher wages. If you are still contributing on higher wages, then EPS shall not exceed 8.33% on 15000/-, i.e., the maximum EPS per month should not be above 1250/-.

Hi, please note the calculations are as follows: EPF (Employee Provident Fund Scheme) is 12% of the basic salary, with 12% contributed by the employer. From the employer's share, 3.67% will be allocated to EPF, and 8.33% will go towards EPS (Employee Pension Scheme). If your employee's basic salary exceeds 15000, you can cap the contribution at 15000.