India’s EPS pension wage ceiling has risen to ₹25,000 a month, but the government’s contribution will still be calculated on wages of no more than ₹15,000. At the 1.16% contribution rate, that keeps the maximum government payment at ₹174 a month.

What changed in the EPS pension rule

A Labour Ministry notification dated October 15, 2026, specifies that the government’s 1.16% contribution is based on wages up to ₹15,000 a month. The amendment takes effect from September 17, 2025.

Previously, the provision said the government would contribute 1.16% of members’ pay, subject to a limit specified by the government. The amendment also removes the central government from the provision limiting contributions when wages exceed the applicable ceiling; that provision now refers only to the employer’s contribution.

What the separate ceiling means for members

If the government’s 1.16% contribution were calculated on the ₹25,000 ceiling, it would amount to ₹290 a month. The ₹174 maximum is therefore ₹116 lower than under that hypothetical calculation.

The lower government contribution does not directly reduce a member’s pension. The Employees’ Pension Scheme is a defined-benefit scheme, with pensions calculated using pensionable service and salary rather than the amount contributed to an individual account.

Funding and minimum pension support

The October notification does not explain why the government contribution remains linked to ₹15,000. The government has told Parliament that it also provides pension support beyond its annual 1.16% contribution.

In August 2026, the Labour Ministry said the ₹1,000 monthly minimum EPS pension is provided through budgetary support in addition to that contribution. The ministry said in July 2025 that the fund is valued annually and that its valuation as of March 31, 2019, showed an actuarial deficit.

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