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Know How to Calculate Employees’ Provident Fund Balance and Interest


Staff Provident Fund (EPF) is a retirement saving choice that’s specifically meant for the long run. Any firm with 20 or extra staff is enabled with the choice to deduct EPF. For EPF, an worker contributes 12 per cent of the fundamental wage whereas the employer contributes 8.33 per cent in the direction of Staff’ Pension Scheme and three.67 per cent to staff’ EPF.

The whole of the worker and employer contribution is deposited in a fund created with the Worker Provident Fund Group. An curiosity quantity primarily based on the month-to-month working steadiness is awarded and added to the fund on the finish of the monetary yr. EPF deduction is necessary for workers who draw a wage lower than Rs 15,000, however others can opt-out of this scheme by way of a declaration made in Type 11 of EPFO.

What’s the present EPF rate of interest?

EPFO decides on the rate of interest to be offered to EPF funds on yearly foundation. The rate of interest relies upon in the marketplace situation and is vetted by the Finance Ministry of the Central Authorities. The present rate of interest of the EPF fund is ready at 8.5 % p.a. which stays unchanged from the rate of interest of the monetary yr 2020-21.

EPF Curiosity calculation

Right here’s the EPF curiosity calculation, if we assume the EPF primary wage and dearness allowance to be Rs 15,000 and the present rate of interest is 8.5 per cent.

Fundamental Wage + D.A. = Rs 15,000

Worker’s Contribution in the direction of EPF = 12 % of Rs 15,000 i.e. Rs 1800

Employer’s contribution in the direction of EPS = 8.33% of Rs 15,000 = Rs 1250

Employer’s contribution in the direction of EPF = 3.67% of Rs 15,000 = Rs 550 (spherical of Rs 550.5)

Complete contribution = Rs 2,350

Present rate of interest is 8.5% p.a.

For the reason that curiosity is calculated on month-to-month working steadiness, the curiosity relevant per 30 days is = 8.50%/12 = 0.7083%

EPF contribution for first month = Rs 2,350

No curiosity on EPF for first month

Second month contribution = Rs 2,350

Complete EPF steadiness = Rs 4,700

Curiosity on the EPF contribution for Might = ₹ 4,700 * 0.7083% = ₹33.29

Rate of interest on inoperative EPF account

An EPF account turns into inoperative in case an worker retires from the service after attaining 55 years of age or dies or migrates overseas completely and software of withdrawal of his/her collected funds shouldn’t be made inside 36 months. Till such time, the curiosity quantity will proceed to accrue on the PF corpus.

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