EPF Calculator

What is EPF?

The Employees’ Provident Fund (EPF) is a retirement benefits scheme for private sector employees, managed by the Employees’ Provident Fund Organisation (EPFO). EPFO is a statutory body of the Government of India responsible for administering the Employees' Provident Fund (EPF), Employees' Pension Scheme (EPS) and Employees' Deposit Linked Insurance (EDLI) scheme.

Eligibility for EPF

EPF membership is generally:

• Mandatory for employees earning less than ₹15,000 per month.
• Organisations with 20 or more employees must register under EPFO.

EPFO Schemes

• EPF Scheme 1952: The main employee provident fund contribution scheme.
• Pension Scheme 1995 (EPS): Provides monthly pension benefits after retirement.
• Insurance Scheme 1976 (EDLI): Offers life insurance cover for employees.

EPF Contribution Details

• Employee: 12% of basic salary + dearness allowance (DA) to EPF.
• Employer: 12% of basic salary + DA, split as:
  • 8.33% to Employees’ Pension Scheme (EPS)
  • 3.67% to Employees’ Provident Fund (EPF)
• Optional Voluntary Provident Fund (VPF): Employees can contribute up to 100% of basic salary and DA on a voluntary basis, but the employer does not match this excess contribution.

EPF Interest Rate

The EPF interest rate is fixed annually by EPFO in consultation with the Ministry of Finance.

FY 2024–25 EPF Interest Rate: 8.25% per annum.

Retirement and EPF Withdrawal

At retirement, employees receive a lump-sum EPF amount, which includes:

• Total employee contributions
• Total employer contributions towards EPF
• Interest accrued on the EPF balance

EPF membership is mandatory for eligible employees and generally cannot be opted out once enrolled.

How Does EPF Work?

Every month, your contribution, along with your employer’s, is deposited into your EPF account (typically 12% of your basic salary and dearness allowance).

• Interest is calculated monthly but credited annually.
• Over time, these contributions and accumulated interest grow into a significant retirement corpus.

Formula to Calculate EPF Maturity Amount

EPF Maturity = {Monthly Contribution × (1 + r)ⁿ − 1} ÷ r

Where:

• Monthly Contribution: Employee + employer EPF contributions
• r: Monthly interest rate (annual EPF rate ÷ 12 ÷ 100)
• n: Number of months of contribution

Example – EPF Maturity Calculation

• Basic Salary + DA: ₹25,000 per month
• Employee Contribution: 12%
• Employer EPF Contribution: 12%
• Total Monthly EPF Contribution: ₹3,917
• EPF Interest Rate: 8.25% per annum (≈ 0.00679 monthly)
• Tenure: 20 years (240 months)
• Total corpus after 20 years is calculated using the above formula.

Key Benefits of EPF

1. Retirement Savings

EPF helps employees build a secure retirement corpus over time, as both employer and employee contribute regularly every month.

2. Tax-Free Returns

The employee’s contribution is eligible for deduction under Section 80C of the Income Tax Act (up to ₹1.5 lakh per year). Subject to conditions, maturity proceeds and interest are tax-free when withdrawn after 5 years of continuous service.

3. Insurance Cover (EDLI)

Along with EPF and EPS, employees are covered under the Employees’ Deposit Linked Insurance (EDLI) scheme, which offers financial protection to the nominee in case of the employee’s death.

4. Loan-like Advance Facility

Members can avail advances (partial withdrawals) against their EPF balance for specific purposes such as medical treatment, marriage, education, home loan repayment or house renovation.

EPF Withdrawal Rules

What is an EPF Calculator and How Does It Help?

An EPF calculator is an online tool that instantly estimates your total retirement corpus based on:

• Current basic salary and dearness allowance (DA)
• Employee and employer contribution rates
• Applicable EPF interest rate
• Number of years of service

It shows you in seconds:

• Total contributions by you and your employer
• Total interest earned on the EPF balance
• Total maturity amount at retirement

How to Use Finanjo’s EPF Calculator – Step-by-Step

1. Enter your monthly basic salary and DA (e.g., ₹25,000).
2. Enter your contribution rate (default is 12%).
3. Enter the employer’s contribution rate (default is 3.67% to EPF, with 8.33% going to EPS).
4. Select the EPF interest rate (e.g., 8.25%).
5. Enter the number of years you plan to work (e.g., 20 years).
6. The calculator instantly updates the total EPF maturity amount, total contributions and interest earned.

PF Calculator Benefits

1. Financial Planning Support

• Helps salaried employees plan their retirement savings more effectively.
• Provides a projected PF balance at retirement and shows how much to save monthly to achieve financial goals.

2. Effortless Tracking

• Automatically calculates total PF contributions and interest accrued over time.
• Eliminates manual calculations, ensuring accurate tracking of retirement funds.

3. Immediate Updates

• Makes it easy to adjust assumptions when there are PF policy changes, interest rate revisions or contribution updates.
• Helps employees make informed decisions on investments and retirement planning.

Frequently Asked Questions About EPF Calculator