EPF Calculator (India)
Accurate split of Employee (EPF), Employer EPF, and Employer EPS with monthly compounding on EPF balance. Defaults assume standard rules; you can edit rates and the wage ceiling.
Your Details
Employer 12% split: EPS = 8.33% of min(Basic, Ceiling); remainder goes to Employer EPF. EPF (employee + employer EPF + VPF) earns the EPF interest (compounded monthly here). EPS does not earn EPF interest in this calculator.
Results
Month-by-Month (first 12 months)
| Month | Basic | Emp EPF | VPF | Er EPF | EPS | Interest | EPF Balance |
|---|
The Employee Provident Fund (EPF) is one of the most trusted retirement savings schemes for salaried employees in India. Managed by the Employees’ Provident Fund Organisation (EPFO), it ensures that a part of an employee’s salary is compulsorily set aside every month to build a financial cushion for the future.
Both the employee and the employer contribute a fixed percentage of the employee’s salary into this fund. Over time, these contributions, along with annual interest declared by the government, create a significant retirement corpus.
For millions of working professionals in India, EPF is not just a savings tool—it’s also a source of tax benefits, financial security, and long-term wealth creation.
Eligibility and Applicability
The EPF scheme is designed mainly for salaried employees working in the organised sector. The rules of applicability are simple:
Who is eligible for EPF?
- Every salaried employee earning up to ₹15,000 per month (Basic + DA) must mandatorily be enrolled in EPF by their employer.
- Employees earning more than ₹15,000 can also join EPF voluntarily, provided both the employer and employee agree.
- Even if your salary is higher, many employers still continue EPF contributions as a benefit for employees.
Which organisations must provide EPF?
- Any establishment with 20 or more employees is legally required to register with the EPFO and provide EPF benefits.
- Smaller organisations with fewer than 20 employees can also opt for voluntary registration.
Key points to note
- Once you become an EPF member, you continue to remain covered under the scheme even if your salary rises above ₹15,000 per month.
- Employees get a Universal Account Number (UAN), which remains the same throughout their career and links all EPF accounts across different employers.
Contribution Structure
One of the most important aspects of the Employee Provident Fund (EPF) is the way contributions are shared between the employee and the employer.
Employee Contribution
- By default, an employee contributes 12% of their Basic Salary + Dearness Allowance (DA) to the EPF account.
- This contribution is deducted directly from the monthly salary.
- Employees can also choose to contribute more than 12% under the Voluntary Provident Fund (VPF), which enjoys the same interest rate and tax benefits as EPF.
Employer Contribution
- The employer also contributes 12% of the employee’s Basic + DA, but this is split into two parts:
- 8.33% goes towards the Employees’ Pension Scheme (EPS), subject to the ₹15,000 wage ceiling.
- The remaining portion goes into the employee’s EPF account.
Example Breakdown
Let’s assume your Basic + DA is ₹20,000.
- Employee contribution (12%) = ₹2,400
- Employer contribution (12%) = ₹2,400
- Out of this, ₹1,250 (8.33% of ₹15,000 ceiling) goes to EPS
- The remaining ₹1,150 goes to EPF
So, every month, your EPF account will receive:
- ₹2,400 (employee) + ₹1,150 (employer) = ₹3,550 total EPF contribution
Meanwhile, ₹1,250 goes to EPS, building your future pension.
📌 Pro Tip: If you are considering other retirement savings options, check our guide on NPS vs EPF to compare flexibility, returns, and pension benefits.
EPF vs EPS vs VPF
While many people use the term EPF broadly, it’s important to understand the three closely related components: EPF, EPS, and VPF. Each serves a different purpose in your retirement planning.
Employee Provident Fund (EPF)
- Purpose: Long-term retirement savings that grow with contributions + annual interest.
- Who contributes? Both employee (12% of Basic + DA) and employer (remaining share after EPS).
- Returns: Earns the declared EPF interest rate, usually between 8–9% annually.
- Tax Benefits: Covered under Section 80C of the Income Tax Act.
Employees’ Pension Scheme (EPS)
- Purpose: Provides a fixed pension after retirement.
- Who contributes? Employer contributes 8.33% of salary (Basic + DA), subject to the ₹15,000 wage ceiling.
- Returns: Pension is fixed based on service years and average salary, not on market returns.
- Taxation: Monthly pension received is taxable as per income tax slabs.
Voluntary Provident Fund (VPF)
- Purpose: Extra savings for employees who want to contribute more than the mandatory 12%.
- Who contributes? Employee only (voluntary); employer is not required to match.
- Returns: Earns the same interest rate as EPF.
- Tax Benefits: Eligible for deduction under Section 80C, and interest is tax-free (if rules met).
Quick Comparison Table
| Feature | EPF | EPS | VPF |
|---|---|---|---|
| Contributor | Employee + Employer | Employer only | Employee only |
| Purpose | Retirement corpus | Monthly pension | Extra retirement savings |
| Interest / Returns | Govt-declared interest | Pension formula-based | Same as EPF interest rate |
| Tax Benefits | Sec. 80C + tax-free growth | Pension taxable | Sec. 80C + tax-free growth |
EPF Interest Rate & Compounding
The EPF interest rate is one of the most attractive features of the scheme. Every year, the EPFO (Employees’ Provident Fund Organisation) declares an interest rate on EPF balances, which is approved by the Ministry of Finance.
Current EPF Interest Rate
- For the financial year 2024–25, the EPF interest rate is 8.25%.
- This interest is credited annually into the employee’s EPF account, but it is calculated monthly on the closing balance.
- You can check the latest official notification on the EPFO Circulars Page.
How Compounding Works in EPF
- Each month, contributions from employee + employer (EPF portion) are added to your balance.
- Interest is applied on the running monthly balance.
- At the end of the financial year, the accumulated interest is credited to your account.
- Over time, this creates the power of compounding, where your contributions + past interest together earn future interest.
Historical EPF Interest Rates
| Financial Year | Interest Rate |
|---|---|
| 2024–25 | 8.25% |
| 2023–24 | 8.25% |
| 2022–23 | 8.10% |
| 2021–22 | 8.10% |
| 2020–21 | 8.50% |
| 2019–20 | 8.50% |
| 2018–19 | 8.65% |
(Source: EPFO official releases)
📌 Pro Tip: EPF interest has historically been higher than other fixed-return instruments like PPF (Public Provident Fund) and bank FDs, making it one of the safest long-term investments for salaried employees.
EPF Tax Benefits
The Employee Provident Fund (EPF) is not only a retirement savings tool but also a powerful way to save on taxes. Both contributions and interest enjoy significant exemptions under the Income Tax Act, 1961.
1. Tax Deduction on Contributions
- Employee contributions (up to ₹1.5 lakh per year) are eligible for deduction under Section 80C.
- This includes mandatory EPF as well as additional Voluntary Provident Fund (VPF) contributions.
2. Tax on Interest
- Interest earned on EPF is tax-free if the employee continues in service.
- However, since April 2021, if the employee contribution exceeds ₹2.5 lakh per year, the interest on the excess is taxable.
📖 News: The Hindu Business Line – EPF Taxation Rule
3. Tax on Withdrawal
- If EPF is withdrawn after 5 years of continuous service, the entire amount (principal + interest) is tax-free.
- If withdrawn before 5 years, it becomes taxable under the employee’s income slab, and TDS may apply.
- For premature withdrawals above ₹50,000, TDS at 10% is applicable (if PAN is provided).
4. Employer Contribution
- Employer contributions to EPF + NPS + Superannuation in excess of ₹7.5 lakh per year are taxable in the hands of the employee.
✅ Key Takeaway:
EPF is part of the EEE (Exempt-Exempt-Exempt) category:
- Contribution – exempt (under 80C)
- Interest – exempt (within ₹2.5 lakh contribution rule)
- Maturity – exempt (if withdrawn after 5 years)
EPF Withdrawals & Advances
The Employee Provident Fund (EPF) is primarily meant for retirement, but employees are allowed to withdraw from their account under specific conditions. Withdrawals can be full (final settlement) or partial (advances).
1. Full Withdrawal
You can withdraw your entire EPF balance under these circumstances:
- Retirement at the age of 58 years.
- Unemployment for more than 2 consecutive months.
- Migration abroad for employment, settlement, or higher studies.
📌 Official resource: EPF Final Settlement Form – EPFO
2. Partial Withdrawals (Advances)
EPFO allows members to take advances from their EPF account for certain life events:
| Purpose | Eligibility Condition | Maximum Amount Allowed |
|---|---|---|
| Marriage (self/children/siblings) | After 7 years of service | Up to 50% of employee share |
| Education (self/children) | After 7 years of service | Up to 50% of employee share |
| Medical treatment | For self, spouse, children, or parents | 6 months’ Basic + DA or employee share, whichever is lower |
| Purchase of house/land | Minimum 5 years of service | Up to 24 months’ wages for land / 36 months’ wages for house |
| Home loan repayment | After 10 years of service | Up to 90% of EPF balance |
| Natural calamity | Immediate | ₹5,000 or 50% of employee share (whichever is lower) |
📖 Reference: EPF Withdrawal Rules – EPFO
3. Online EPF Withdrawal Process
Employees can submit a claim online through the UAN Member e-Sewa Portal:
- Log in at EPFO Member Portal.
- Go to “Online Services → Claim (Form-31, 19, 10C & 10D)”.
- Enter bank account details and submit Aadhaar-linked OTP.
- Amount gets credited directly to the bank account after processing.
4. Tax Implications on Withdrawal
- Withdrawals after 5 years of continuous service are tax-free.
- If withdrawn before 5 years, the amount becomes taxable and TDS may apply.
Key Takeaway:
While EPF is designed for long-term retirement savings, you can access funds in emergencies or specific life events without closing your account.
Pros & Cons of EPF
Like every investment and savings scheme, the Employee Provident Fund (EPF) has both strengths and limitations. Knowing them helps you make informed financial decisions.
Advantages of EPF
- Guaranteed Returns – Backed by the Government of India with an assured interest rate (currently 8.25% for FY 2023-24).
- Safe & Risk-Free – Unlike stock market investments, EPF is not market-linked.
- Tax Benefits – Contributions are eligible under Section 80C of the Income Tax Act; interest and maturity are also tax-exempt (subject to rules).
- Retirement Security – Builds a long-term corpus for post-retirement needs.
- EPS Pension Benefit – Employer contribution also creates eligibility for a monthly pension.
- Loan/Advance Facility – Partial withdrawals allowed for marriage, medical needs, education, or housing.
Limitations of EPF
- Limited Liquidity – Funds are locked until retirement or specific conditions are met.
- Interest Rate Revisions – Interest rates are revised annually by EPFO and may reduce in the future.
- Wage Ceiling on EPS – Pension contribution capped at ₹15,000, which limits future pension benefits.
- Employer Dependency – Requires employer registration and timely deposits; delays can affect balance.
- Inflation Risk – Though safe, EPF returns may not always outpace inflation in the long run.
Quick Comparison
| Aspect | Advantages | Limitations |
|---|---|---|
| Returns | Assured by Govt. (8–9%) | Rate revised annually, not fixed long-term |
| Safety | Govt-backed, risk-free | Corpus growth slower vs. equity |
| Liquidity | Partial withdrawals allowed | Full withdrawal restricted until retirement/unemployment |
| Tax Benefits | EEE status (Exempt-Exempt-Exempt) | Contribution cap of ₹2.5 lakh for tax-free interest |
| Pension (EPS) | Provides post-retirement monthly income | Pension based on ceiling, often modest |
Key Takeaway:
EPF is ideal for low-risk, long-term savings and should be part of every salaried employee’s retirement plan. However, it should be complemented with other investments (like NPS or mutual funds) for better growth.
Recent Updates & Changes in EPF
The Employees’ Provident Fund (EPF) rules and interest rates are updated regularly by the Employees’ Provident Fund Organisation (EPFO). Staying aware of these changes helps employees plan better for retirement.
1. Latest Interest Rate (FY 2023–24)
- EPFO has declared 8.25% as the official EPF interest rate for the financial year 2023–24.
- This interest will be credited to members’ accounts once the Central Government notifies and approves it.
2. Taxation Rule for High Contributions
- Since April 2021, interest earned on employee contributions exceeding ₹2.5 lakh per year is taxable.
- For government employees (where employer doesn’t contribute), the limit is ₹5 lakh per year.
📖 Read more: CBDT Notification on EPF Tax
3. Digital Services & UAN
EPF members can now access almost all services online, including withdrawals, transfers, and KYC updates.
- The Universal Account Number (UAN) is portable across jobs, ensuring seamless transfer of balances.
👉 Log in here: EPFO Member Portal
4. Higher Pension under EPS
- In March 2023, EPFO allowed eligible employees to opt for a higher pension under EPS based on actual salary, not just the ₹15,000 ceiling.
- Employees had to submit a joint option form with their employer before the extended deadline.
📌 Details: EPFO EPS Higher Pension FAQ
5. Aadhaar & KYC Linking Mandatory
- To receive EPF benefits smoothly, employees must link their Aadhaar, PAN, and bank details with UAN.
- Without KYC compliance, withdrawals and transfers may be delayed.
📖 EPFO KYC: UAN KYC Update Guide
Key Takeaway:
EPF is becoming increasingly digital, transparent, and employee-friendly. Regular updates on interest rates, taxation rules, and pension schemes make it essential for salaried individuals to track EPFO notifications.
Conclusion
The Employee Provident Fund (EPF) is more than just a compulsory savings scheme — it’s a cornerstone of financial security for salaried employees in India. With guaranteed returns, tax benefits, and a built-in pension component (EPS), it ensures you build a retirement corpus steadily throughout your career.
By understanding how EPF works — from contributions and interest rates to withdrawal rules and tax implications — you can make smarter financial decisions. For most employees, EPF should be treated as a foundation of retirement planning, and complemented with other investments like NPS or mutual funds for long-term wealth creation.
Frequently Asked Questions
1. What is the minimum salary to be eligible for EPF?
Employees earning up to ₹15,000 per month (Basic + DA) must mandatorily be enrolled in EPF. Those earning above ₹15,000 can also join voluntarily if the employer agrees.
2. Can I contribute more than 12% of my salary to EPF?
Yes. You can contribute extra under the Voluntary Provident Fund (VPF). VPF earns the same interest as EPF and enjoys tax benefits under Section 80C.
3. Is the EPF interest rate fixed?
No. The EPF interest rate is reviewed annually by the EPFO. For FY 2023–24, the rate is 8.25%.
4. What happens to my EPF when I change jobs?
Your UAN (Universal Account Number) remains the same. You can transfer your old balance to the new employer’s EPF account online through the EPFO Member Portal.
5. Is EPF withdrawal before 5 years taxable?
Yes. If you withdraw before completing 5 years of continuous service, the amount becomes taxable, and TDS may apply. Withdrawals after 5 years are tax-free.
6. Can NRIs contribute to EPF?
No. Only Indian residents employed in establishments covered under EPFO can contribute to EPF. However, NRIs who had EPF accounts during their employment in India can continue to withdraw the balance later.
7. What is the difference between EPF and PPF?
- EPF: For salaried employees, both employer and employee contribute; mandatory for eligible organisations.
- PPF: Open to anyone (salaried or self-employed), voluntary savings scheme with a 15-year lock-in.