Everything You Need to Know About EPF (Employee Provident Fund)
The Employee Provident Fund (EPF) is one of the most popular retirement savings schemes in India, managed by the Employees' Provident Fund Organization (EPFO). It serves as a safety net for salaried employees, ensuring they have a substantial corpus when they retire. Using our EPF Calculator, you can estimate exactly how much money you will accumulate over your career.
How Does EPF Work?
Both the employee and the employer contribute 12% of the employee's Basic Salary (plus Dearness Allowance, if applicable) into the EPF account every month. However, the breakdown of these contributions differs:
| Contributor | Contribution % | Where it goes? |
|---|---|---|
| Employee | 12% | 100% goes to EPF Account |
| Employer | 12% | 3.67% goes to EPF Account |
| 8.33% goes to EPS (Pension Scheme)* |
*Note: The EPS contribution is calculated on a capped wage of ₹15,000. This means the maximum contribution to EPS is usually ₹1,250 per month. The balance of the employer's 12% share goes into the EPF.
Current EPF Interest Rate (2025)
The interest rate for EPF is decided annually by the EPFO board. For the Financial Year 2023-24 (applicable in 2025 until revised), the interest rate is 8.25% per annum. This interest is calculated monthly but credited to the account at the end of the financial year.
Key Benefits of EPF
- Tax Saving: Employee contributions to EPF are eligible for tax deduction under Section 80C of the Income Tax Act (up to ₹1.5 Lakh per year).
- Tax-Free Returns: The interest earned and the maturity amount withdrawn after 5 years of continuous service are entirely tax-free.
- Retirement Security: It forces disciplined savings, ensuring a large corpus for old age.
- Emergency Fund: Partial withdrawals are allowed for specific needs like marriage, medical emergencies, or home purchase.
How to Use the Toolvala EPF Calculator?
Our calculator uses the compound interest formula applied to monthly contributions. Here is how to input your data:
- Basic Salary: Enter your monthly Basic Salary + DA. Do not enter the full CTC or Gross Salary.
- Age: Enter your current age and the age at which you plan to retire (usually 58 or 60).
- Current Balance: If you already have an EPF account, check your passbook and enter the current balance. This makes the calculation much more accurate.
- Annual Hike: Enter the expected percentage increase in your salary every year. This helps in adjusting the contribution amount annually.
Understanding UAN (Universal Account Number)
Every EPF member is allotted a 12-digit UAN. This number remains the same throughout your life, even if you change jobs. It acts as an umbrella for the multiple Member IDs allotted to you by different establishments. You can use your UAN to check your PF balance, transfer funds, or withdraw money online via the EPFO portal.
Withdrawal Rules
While EPF is meant for retirement, you can withdraw the full amount if:
- You retire from service after attaining 58 years of age.
- You remain unemployed for a period of 2 months or more.
Partial withdrawals are allowed subject to certain conditions (e.g., 7 years of service for marriage/education, 5 years for house purchase/renovation).