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Maximize Retirement Savings: Combine EPF and NPS for Salaried Employees
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News18•03-10-2026, 13:30
Maximize Retirement Savings: Combine EPF and NPS for Salaried Employees
- •Salaried employees can simultaneously contribute to both EPF and NPS, leveraging two distinct retirement savings avenues.
- •EPF is an employment-linked scheme with mandatory contributions from both employee and employer, while NPS is a market-linked investment option.
- •EPF contributions are typically 12% of eligible wages from both employee and employer, with a portion of employer contribution going to EPS.
- •NPS allows regular market-linked investments for retirement, with contributions from employee, employer, or both, offering diverse investment choices.
- •Both schemes offer different tax benefits; NPS provides deductions under Section 80CCD(2) for eligible contributions, including employer contributions.
Key Questions Answered
Yes, having an EPF account does not prevent an employee from subscribing to NPS. Both schemes are separate retirement savings options and can be maintained concurrently under applicable rules.
Under the standard EPF contribution model, an employee contributes 12% of eligible wages, while the employer also contributes. A portion of the employer's contribution goes toward the Employees’ Pension Scheme (EPS) based on applicable rules.
EPF provides a structured, employment-linked savings approach through regular salary contributions, whereas NPS is a defined-contribution pension system that invests accumulated funds into market-linked asset classes.
