The Department of Expenditure has reportedly approved increasing the Employees’ Provident Fund (EPF) wage ceiling from Rs 15,000 to Rs 25,000, as per a report from Moneycontrol. The report further claims that the implementation date of the revised wage ceiling will be decided after the Cabinet’s approval. The current wage ceiling of Rs 15,000 is in place since September 2014. If the report is true, it can bring a lot of new employees in the ambit of EPF and the Employees’ Pension Scheme (EPS) as employees earning up to Rs 25,000 as the basic pay and dearness allowance will be officially required to join both the schemes. If the EPF wage ceiling increases to Rs 25,000, it may decrease the in-hand salary of employees who are contributing to EPF as per the wage ceiling, as a bigger portion of their pay will be contributed to the EPF. But it will help them build a retirement corpus. Also Read: New EPF wage ceiling of Rs 25,000? Who will benefit and what it means for EPF subscribers; here’s what the report saysBefore you continue readingHow financially free are you?Most people overestimate their financial freedom. Discover your Financial Freedom score through a quick surveyThe other significant change will be in the form of a higher EPS pension for employees who are contributing to EPS as per wage ceiling, which is likely to increase by nearly 67% compared to the Rs 15,000 wage ceiling if an employee is earning at least Rs 25,000 basic pay and completes at least 10 years of pensionable service. For instance, an employee with 30 years of service is eligible to get a pension of Rs 6,857 per month under the Rs 15,000 wage ceiling. However, with the new wage ceiling of Rs 25,000 per month, their monthly pension will go up to Rs 11,429 per month, which is an increase of Rs 4,571, or nearly 67%. Who gets EPS pension? As per the current rules, employees with a basic salary of up to Rs 15,000 is mandatorily required to become a member of the EPS. They become eligible to get the pension after completing at least 10 years of service.Also Read: 8th Pay Commission: How 6% annual increment may add Rs 20 lakh to Level 8 employees' basic pay in 10 yearsAs per the EPFO website, any new employee joining an establishment from September 1, 2014, and a drawing basic wage more than Rs 15,000/- per month can’t get the membership to the EPS pension fund. How is EPS pension calculated? The EPS pension formula remains the same under the EPS Pension Scheme 2026, which has replaced the EPS 1995 scheme. The formula is as follows- Monthly EPS pension = (Pensionable salary × pensionable service) ÷ 70 Here pensionable salary is the average monthly salary (basic pay+dearness allowance) drawn during the last 60 months before exiting the pension scheme.Also Read: Will FD investors get higher interest rates as Iran-US war continues and inflation shoots?In this write-up, we will calculate the monthly EPS pension under the Rs 15,000 and Rs 25,000 wage ceilings at service periods of 10-30 years. Though the wage ceiling may increase during the service years of an employee, we will assume that it will remain at Rs 25,000 through service years. The EPFO rule says if service years of an employee are 20 or more, they get a 2-year bonus. It means, if someone has completed 20 years of service, their service years for EPS pension calculation will be counted as 22 years. Similarly, if service years are 25, they will be counted as 27. 30 years of eligible service- Know your EPS pension Basic pay ₹ 25,000 Service years 32 Pension under Rs 15,000 wage ceiling ₹ 6,857 Pension under Rs 25,000 wage ceiling ₹ 11,429 Extra pension under Rs 25,000 wage ceiling ₹ 4,571 Pension increase (%) 67% 25 years of eligible service- Know your EPS pension Basic pay ₹ 25,000 Service years 27 Pension under Rs 15,000 wage ceiling ₹ 5,786 Pension under Rs 25,000 wage ceiling ₹ 9,643 Extra pension under Rs 25,000 wage ceiling ₹ 3,857 Pension increase (%) 67% 20 years of eligible service- Know your EPS pension Basic pay ₹ 25,000 Service years 22 Pension under Rs 15,000 wage ceiling ₹ 4,714 Pension under Rs 25,000 wage ceiling ₹ 7,857 Extra pension under Rs 25,000 wage ceiling ₹ 3,143 Pension increase (%) 67% 15 years of eligible service- Know your EPS pension Basic pay ₹ 25,000 Service years 15 Pension under Rs 15,000 wage ceiling ₹ 3,214 Pension under Rs 25,000 wage ceiling ₹ 5,357 Extra pension under Rs 25,000 wage ceiling ₹ 2,143 Pension increase (%) 67% 10 years of eligible service- Know your EPS pension Basic pay ₹ 25,000 Service years 10 Pension under Rs 15,000 wage ceiling ₹ 2,143 Pension under Rs 25,000 wage ceiling ₹ 3,571 Extra pension under Rs 25,000 wage ceiling ₹ 1,429 Pension increase (%) 67%