EPF Interest Rate In 2022: How To Calculate Interest On EPF Contribution
18 May 2022
Employee Provident Fund or EPF has been popular among salaried individuals for a long time now. It is a preferable post-retirement scheme under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. Government reviews the EPF interest rate annually. The current EPF interest rate stands at 8.1%.
Historical Trend of EPF Interest Rate
The following table will give you get an idea of the diversity or stability of EPF interest rates over the years:
Annual Interest Rate (%)
12% (April-June), 11% from July 2001
EPF Interest Rate Calculation Explained
The following illustration will help you understand the calculation of EPF interest rate:
Suppose the employee’s basic salary is Rs. 45,000 and the person joined the organisation in April 2022. The calculation for EPF interest will be as follows:
Percentage of salary
EPF by employee
EPS by employer
EPF by employer
Total contribution per month
*Note: As discussed before, if the salary exceeds Rs. 15,000, then Rs. 1,250 is transferred to the EPS account. So, 8.33% of Rs. 45,000 was Rs. 3,748, and after deducting Rs. 1250, the rest was transferred to the EPF account.
The current interest rate is 8.1%. So, an interest rate of 0.00675% will be levied on a monthly basis.
Let’s check it out in detail.
Overall EPF contribution: Rs. 5,400
Interest for April on the PF contribution: NIL (interest is not applicable for the first month)
EPF balance at the end of April 2022: Rs. 5,400
EPF contribution for May 2022: Rs. 5,400
Overall EPF balance as of May 2022: Rs. 10,800
Interest on the contribution towards EPF for May: Rs. 10,800 x .7083% = Rs. 76.4964
Refer to the table below to get an idea of how EPF interest is calculated in a financial year:
Basic Salary + Dearness Allowance (Rs.)
Employer’s Contribution (Rs.)
Employee’s Contribution (Rs.)
Total Balance at the End of the Month (Rs.)
Interest Earned (Rs.)
Note that this table is for illustrative purposes only
How to Use a PF Calculator
You can also use an EPF or PF calculator to check your accumulated wealth by the time you retire due to EPF contribution. All you need to do is fill in the following details – your age, basic monthly salary, contribution towards PF (in %), your employer’s contribution towards PF (in %), expected average annual increase in salary (in %), age when you intend to retire, and interest rate. Upon completion, you would be able to check the amount you could accumulate during retirement.
EPF Eligibility Criteria
You need to satisfy the following criteria to be eligible to enjoy EPF benefits:
Employees working for an organisation are eligible for EPF benefits from the very first day of their joining.
A company consisting of a minimum of 20 employees can offer EPF benefits to its employees.
The benefits cannot be availed by the residents of Jammu and Kashmir.
Tax Benefits on EPF
EPF account holders are eligible for tax deduction under Section 80C of the Income Tax Act, 1961. The maximum amount available for tax benefits in an EPF account is Rs. 1 lakh. Also, if you have contributed to an EPF account for five consecutive years, the amount saved up to this time will be exempted from tax. But, if the duration of your EPF account is less than 5 years, the amount accumulated will be subject to TDS deduction upon withdrawal.
Contribution Rate If the Employee’s Salary Does Not Exceed Rs 15,000
If an employee’s salary is not more than Rs. 15,000, then the following breakup of contribution from salary is maintained:
Employee contribution to EPF: 12%
Employer contribution to EPF: 3.67%
Employer contribution to EPS: 8.63%
Contribution Rate If the Employee’s Salary Is More Than Rs 15,000
This section will show you the contribution break up if the salary exceeds Rs. 15,000.
Employee contribution to EPF: 12%
Employer contribution to EPS: 8.33%
Employer contribution to EPF: balance left after deduction of 8.33% from 12% of the salary.
As these schemes’ benefits are provided and looked after by the employer, most of us do not bother to know about them in detail. But it is important to be aware of the current EPF interest rate and have a clear knowledge of these calculations.
Q1. Who maintains or regulates the EPF rules?
Ans:Employees’ Provident Fund Organisation under the Ministry of Labour and Employment, Government of India maintains or regulates the EPF rules.
Q2. Under what circumstances an EPF account does not receive any interest?
Ans: When there is no contribution in an EPF account for 36 consecutive months, the account does not get any more interest. This usually happens when an employee forgets to transfer their EPF account in the event of job transfer. Also, after an employee attains 58 years of age, the amount in the EPF account stops getting any interest.
Q3. What are the details required to use the EPF calculator?
Ans: One will need to enter the following details in the EPF calculator: Age of employee Age of retirement Available EPF balance Monthly basic salary and dearness allowance Monthly EPF contribution Expected salary hike
Q4. What is UAN?
Ans: UAN or Universal Account Number is a unique number provided to every employee by EPFO. It is used by the employer to manage their PF account. One can also transfer and withdraw funds by logging in to the UAN portal.
Q5. How can you reach EPF customer care?
Ans: If you have doubts or problems regarding PF, you can contact EPFO customer care on 1800118005 (toll-free). You can also visit the EPFO office at the following address: Bhavishya Nidhi Bhavan 14, Bhikaji Cama Place New Delhi – 110066
Before you go…
Looking for instant 🚀 personal loans 24*7 anywhere, anytime? Get personal loans up to ₹20 lakh starting at 9.9% p.a. Install the Navi app now!!
Or, maybe you’re looking to buy that house you’ve been eyeing 🏠 and you need a loan of up to ₹5 crore. Install the Navi app now and get instant in-principle approval right away! Interest rates starting at 8.39% p.a.
How about an affordable health insurance policy👨⚕️ starting at a monthly premium of just ₹235? Install the Navi app now and get your policy in under 2 minutes.
Instead, want to put your savings into action and kick-start your investment journey 💸 But don’t have time to do research. Invest now with Navi Nifty 50 Index Fund, sit back, and earn from the top 50 companies.
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
Cristiano Ronaldo 7 ‘Dark’ Jokes, Football’s Bad Boy
100K+ Laid Off! 7 Ways to Be Financially Prepared for Layoffs
Looking Through SKY: Suryakumar Yadav’s Success Secrets🤫
10 Best Party Places in Bangalore: Rooftop, Brewery, Poolside
10 Best Christmas Gift Ideas Even Santa Wouldn’t Ignore
7 Tax Planning Tips You Cannot Ignore!
Save More! Check Out 10 Best Fuel Credit Cards in India
Inside Allu Arjun’s 100 Cr ‘Rectangle’ House
How to Earn Money on YouTube – Check 7 Sure Shot Ways!
7 Successful Women Entrepreneurs in India Who are Millionaires
We are a diverse group of writers, editors and Subject Matter Experts striving to bring the most accurate, authentic and trustworthy finance and finance-related information to our readers. Our mission is to simplify jargon and industry lingo. We believe sharing knowledge through relatable content is a powerful medium to empower, guide and shape the mindset of a billion people of this country.
How Implementing Economic Order Quantity (EOQ) Could Drive Effective Inventory Management
Economic Order Quantity (EOQ) is a metric that helps determine the optimal order quantity a busines...Read More »
Stock Appreciation Right – Types, Examples and How do they work?
Companies adopt several methods to incentivise or retain their employees. One of the most common me...Read More »
Capital Adequacy Ratio (CAR) – Meaning, Formula and Advantages
Capital adequacy ratio (CAR), also known as capital-to-risk weighted assets ratio (CRAR) measures a...Read More »
How to Evaluate a Company Using DuPont Analysis? What are its Benefits and Drawbacks?
Capital preservation often takes precedence over profit realisation for stock market investors. The...Read More »
What is Contingent Liability? – Impact, Classification and Examples
Contingent liability is defined as a liability that may occur based on the outcome of future events...Read More »
Introduction to Wealth Management, its Objectives, Types & Strategies
Wealth management is an exclusive form of financial management that combines financial and investme...Read More »
What is Helicopter (Drop) Money and How Does It Impact the Economy?
During times of recession, the purchasing power of individuals falls. This leads to a decrease in o...Read More »
What are Annuities and How Do they Work? Should you Invest in Them?
An annuity is a contract between an insurance company and a policyholder. Policyholders must make e...Read More »
What is the Intrinsic Value of a Stock and How Does it Differ From Its Market Value?
The term ‘intrinsic value’ refers to the natural or essential value of any object. In stock mar...Read More »
What is Interest Coverage Ratio – How to Calculate It and Its Significance
Prudent management of debt is necessary for a company to avoid bankruptcy and failure while mobilis...Read More »
What is the Piotroski Score? Why Do Investors Use it to Evaluate a Company’s Finances?
Would-be investors must conduct thorough research into the companies they plan to invest in. Such r...Read More »
What is a Parent Company and How to Establish One?
Companies frequently have a diverse range of assets, which may include other enterprises. The paren...Read More »
Diwali 2022: Diwali Holidays – The Festival of Lights
The ‘Festival of Lights’ is one of the biggest and most anticipated festivals in India. This is...Read More »
Best Index Funds – Top 20 Index Funds in India
Index funds replicate the performance of a stock market index, such as the Sensex or Nifty 50 to ge...Read More »