Understanding EPS Eligibility: Does a Salary Cap Affect Membership When Switching Jobs?

If an employee joins a company in 2019 and becomes a member of the EPF but no EPS is deducted due to their basic salary being higher than Rs.15,000, and then later joins another company in 2021 with PF wages capped to Rs.15,000, will he be a member of the EPS in the second company?

EPS Exclusion for High Earners

EPS does not apply to employees earning wages above 15,000/- as they are considered excluded members. The calculation is not based on capping.

Thank you, Jeevarathnam, My apologies, let me rephrase. There was an employee who joined a company in 2019 with a basic wage of 20,000. The company deducts EPF at 20,000, and there is no contribution to EPS as per the amendment of 2014.

Later, the employee joined another company in 2021 where PF contribution is deducted and capped at 15,000 for all employees. In this case, he was not a member of EPS earlier due to higher wages, but in the second company, his contribution is capped at 15,000 for PF.

My question is whether there will be a contribution towards EPS at 8.33% as the contribution is capped at 15,000.

Thank you.

Hi, I got your point.

As per the EPF circular dated September 2014, it is very clear that any employee who is drawing a salary above Rs. 15,000 and joined post-September 2014 is not entitled to EPS. The circular never mentioned the contribution amount.

According to the circular, pension is not applicable to the said employee.

Nowadays, the EPF department is rejecting the transfer claims/settlements for employees for whom EPS was contributed by mistake, even though they restricted the contributions to Rs. 15,000.

Hi, in my first company, the basic pay was Rs. 15,000 exactly, and the gross pay was Rs. 18,333. Will I be eligible for EPS?