In order to know about the interest for your EPF, you will need to furnish some minimum details to know the total amount you will receive as interest at the time of your retirement. Entering these details in an EPF calculator will give you all details.
EPF Interest Rate
Before heading towards EPF calculation, an employee should be aware of the following things:
Usually, the central government periodically notifies the rate of EPF interest rate. The EPF interest rate notice is available on the official website of EPFO, India. The following are the interest rates of the last 4 fiscal years:
- Fiscal Year 2019-20 - 8.5%
- Fiscal Year 2018-19 - 8.65%
- Fiscal Year 2017-18 - 8.55%
- Fiscal Year 2016-17 - 8.65%
- Fiscal Year 2015-16 - 8.80%
- Based on an employee’s monthly average balance, EPF interest amount is calculated. EPF contributors will receive interest on their PF contribution as well as employer’s contribution towards the same.
- Although, PF interest is calculated on a monthly basis, the total interest amount is credited on yearly basis.
- The credit payout is usually done at the end of March.
- EPF accounting year starts from February and ends in March.
Information required to use a PF Interest Calculator
An employee should enter the following information in a PF interest calculator to know his/her PF interest:
- Current age of an employee.
- Current EPF balance.
- Age of retirement.
- Monthly basic pay.
- Monthly dearness allowance.
- Monthly EPF contribution in percentage.
- Expected salary hike.
Once you enter the above-mentioned information in the PF calculator, it will reveal the total interest you would receive at the time of retirement. EPF calculation is, therefore, made easier by EPF calculator.
Tax Benefits on EPF contributions
An employee can get tax benefits for contributing to PF accounts under section 80C of the Indian Income Tax Act, 1961. This benefit can be availed for contributing up to Rs. 1 lakh to a PF account. If you contribute for an employee provident fund account for 5 years, you will escape tax deduction on the amount you have contributed. But, if the duration of your EPF contribution is less than 5 years and you withdraw your PF contribution before it completes 5 years, income tax will be deducted at source (TDS).
EPF & EPS contributions made by employees/ employers
|Scheme Name||Employee’s contribution||Employer’s contribution|
An employee can apply for EPF withdrawal or transfer, if he/she is jobless for two months after leaving the previous job. If you join a new company, it’s advisable you EPF transfer to your new employer at the time of joining, instead of withdrawing it.
About EPF & EPS
- EPFO has made PF deduction mandatory, if your monthly salary is less Rs.15,000.
- You as an employee contribute certain amount of your monthly salary towards Employee Pension Scheme (EPS) which you would receive as pension after retirement. A minimum contribution of Rs.1000 has been decided as monthly pension amount for EPF account holders. You can also calculate your provident fund pension contribution by using a PF Pension Calculator.
- An EPF account contributor can nominate any one of his family members as nominee. In case, something unfortunate happens to the EPF contributor, the nominee will receive an insurance coverage up to Rs. 3,00,000. Earlier, Rs.1.56 lakh was allotted as insurance coverage. An employee should make sure he/she informs the nominee about this provision.
- The minimum contribution made by an employee towards his/her PF account should be 12% of his basic salary. Earlier, the minimum salary limit for EPF contribution was Rs. 6,500. But now, it has been raised to Rs. 15000. For example, if your monthly salary is Rs.15000 and you contribute 12% of your basic salary towards your provident fund account, your monthly PF deposit will be Rs.1,800. Your employer will be contributing Rs.550 and Rs.1,250 towards EPF & EPS respectively on a monthly basis.