Pension Calculator: How much pension will you get after 10 years of service? Understand the formula for EPF pension calculation
EPF Pension Calculation: How much pension will be received after 10 years of service?
EPF Pension Eligibility:
The employee is required to contribute to the EPF scheme for at least 10 years.
Pension benefits are available after the age of 58 years.
EPF Pension Calculation Formula:
Pension amount = (Pensionable salary x service period) / 70
Important Terms:
Pensionable salary:
It is based on the average salary of the last 60 months.
Service period:
Full years of job are counted. If the service is more than 6 months, an additional year is added.
Example:
If your average monthly salary is ₹15,000 and you have worked for 10 years, then:
Pension amount = (₹15,000 x 10) / 70
= ₹1,500 per month
Important points:
If you quit the job before 10 years, you can only withdraw EPF money, not pension.
There is an option to take early pension at the age of 57, but it will be deducted by 4%.
Let’s take a detailed example so that the whole process becomes clear to you:
EPF Pension Calculation Step by Step
- Valid Information:
Average monthly salary (average of last 60 months) = ₹15,000
Job tenure = 12 years
The formula as per EPFO rules is:
Pension = (Pensionable salary x service period) / 70
- Calculation:
= (₹15,000 x 12) / 70
= ₹1,80,000 / 70
= ₹2,571.42 per month (approximately ₹2,571)
If service tenure increases:
On 15 years of service:
= (₹15,000 x 15) / 70
= ₹3,214 per month
On 20 years of service:
= (₹15,000 x 20) / 70
= ₹4,285 per month
Important conditions:
If you have worked for less than 10 years, you will get only EPF money instead of pension.
If you take pension at the age of 57, 4% will be deducted every year.
You can also withdraw your EPF balance along with pension.