Where the money went
VerifiedYour employer’s twelve per cent does not all go where yours does.
A third of it is diverted to the pension scheme, and that third is worked out on a ceiling rather than on your salary. Here is one month, rupee by rupee.
Wages on record: ₹32,600
We recomputed this month from the rules. It adds up.
| What | On record | Should be |
|---|---|---|
| Your own 12% | ₹3,912 | ₹3,912 |
| Employer's share reaching the fund | ₹2,662 | ₹2,662 |
| Employer's share diverted to pension | ₹1,250 | ₹1,250 |
The month, rupee by rupee
Taken from your pay
₹3,912
- Straight into your provident fund₹3,912
Your own 12%. All of it reaches your balance — none of it goes to pension.
Paid by your employer, matching yours
₹3,912
- Into your provident fund₹2,662
- Diverted to the pension scheme₹1,250
The pension share is 8.33% of ₹15,000, not of your wage — which is why it is ₹1,250 and not ₹2,716.
Paid by your employer on top, which you never see
₹238
- Life insurance cover for your family (EDLI)₹75
- Administration₹163
This is why an employer will tell you provident fund costs them thirteen per cent while your payslip only shows twelve.
Into your fund this month
₹6,574
Into your pension this month
₹1,250
Total cost to your employer
₹4,150
Your pension stopped growing with your salary in April 2021
₹65,640
less has gone into your pension than your salary would suggest.
For 60 months your wages have averaged ₹28,140, while the pension share of your employer’s contribution has been worked out on ₹15,000 throughout. Nothing is wrong and nobody has taken anything from you: this is exactly what the scheme provides for.
It matters because a monthly pension is calculated from pensionable salary, and yours has been frozen at the ceiling for years. Most members discover this at fifty-eight, when the contributions can no longer be revisited.
What your pension service adds up toTwelve per cent from the member and twelve from the employer, of which 8.33% of the pensionable wage goes to the pension scheme, are the ordinary statutory rates. Some categories of establishment contribute at a lower rate, and the pensionable wage ceiling of ₹15,000 has been revised before and may be again.
EDLI and administration are charged on the same ceiling wage and are borne by the employer. They are shown here because their absence from a payslip is the most common reason a member and an employer disagree about what is being paid.
This is a good-faith reading of published rules for the ordinary case, not advice about your particular establishment.