How EPF works
The Employees' Provident Fund (EPF) is India's most widely used retirement savings scheme, covering salaried employees in establishments with 20 or more workers. Both employee and employer contribute every month, and EPFO credits interest annually on the accumulated balance.
Contribution breakdown
| Contributor | Rate | Goes to |
|---|---|---|
| Employee | 12% of basic+DA | EPF account |
| Employer | 3.67% of basic+DA | EPF account |
| Employer | 8.33% of basic+DA | EPS (pension scheme) |
Your total EPF account receives 12% (employee) + 3.67% (employer) = 15.67% of your basic+DA each month. The remaining 8.33% goes to the Employee Pension Scheme (EPS) and is not part of your EPF withdrawal corpus — it funds your pension after retirement.
Interest calculation
EPFO calculates interest on the monthly running balance but credits it to your account only at the end of each financial year (March 31). The interest rate is declared by the Central Board of Trustees annually — it has been 8.25% for FY 2023-24. You can edit the rate in the calculator if a newer rate has been declared.
How this calculator projects your corpus
The projection works year by year: contributions are added monthly based on your current basic+DA, interest accrues on the running balance, and at the end of each year the interest is credited and salary is grown by your specified rate. This gives a realistic compound growth picture across your working years.
EPF withdrawal rules
- On retirement (age 58 or superannuation): full EPF balance is withdrawable, tax-free after 5 years of continuous service.
- Partial withdrawal: allowed for specific purposes — buying a house, medical emergencies, higher education, marriage — subject to conditions on tenure and amount limits.
- Unemployment: 75% of balance can be withdrawn after 1 month of unemployment; the remaining 25% after 2 months.
- Tax on early withdrawal: if withdrawn before 5 continuous years of service, the amount is taxable as salary and TDS at 10% (or 34.608% without PAN) is deducted by EPFO.
Tax treatment of EPF
EPF enjoys EEE (Exempt-Exempt-Exempt) status for most contributions: contributions are deductible under Section 80C (old regime only, up to ₹1.5L), interest earned is tax-free, and withdrawal after 5 years is tax-free. However, interest on employee contributions exceeding ₹2.5 lakh per year is taxable from FY 2021-22 onwards — relevant mainly for high earners.
Frequently asked questions
What is the current EPF interest rate?
How is EPF interest calculated?
Is EPF withdrawal taxable?
What is the difference between EPF and EPS?
Can I increase my EPF contribution above 12%?
Disclaimer: This calculator provides a projection based on your inputs and assumed salary growth and interest rates. Actual EPF corpus will vary based on actual salary changes, EPFO rate revisions, partial withdrawals, and periods of unemployment. This is for illustrative purposes only and not financial advice.