EPF a/c interest calculation : Components & illustration (Employees’ Provident Fund)

Are you a salaried Employee? Do you contribute a portion of your monthly salary towards Employees’ Provident Fund (EPF)? Are you aware that your employer also contributes a matching amount towards your EPF account? Do you know about the various components of your employer’s PF contribution? Are you aware of ‘how interest is calculated on your monthly subscriptions to Provident Fund?

I was in need of the EPF statement to resolve all the above queries and answer them in a simple and easy to understand manner. Since I am a self employed individual, I can’t contribute to Employees provident Fund and do not have online access to EPF UAN (Universal Account Number) member portal. (You can view or download your EPF statement online @ EPFO’s UAN Member Portal)

Many thanks to one of my good friends for sharing his latest employees’ provident fund statement and that has helped me in preparing this post. Before analyzing the EPF statement and how EPF’s interest is calculated, let us first understand the various components of EPF.


Latest Update (Budget 2021)Interest on EPF Contributions above Rs 2.5 lakh is Taxable | Budget 2021


What are the Components of my Employees Provident Fund (EPF account)?

If you take out your monthly pay-slip and check, you can understand that every month 12% of your “salary” is contributed towards EPF account. Your total monthly contribution is routed towards Employees’ Provident Fund.

Your employer also contributes 12% of the salary to your EPF a/c. But your employer’s monthly contribution is routed towards various components of PF.

Out of this 12% of your employer’s monthly contribution, 8.33% goes towards EPS (Employees Pension Scheme) and only 3.67% is invested in Employees’ Provident Fund (EPF). So, you contribute 12% of your basic salary and your employer contributes 3.6% of your basic salary towards EPF deposits.

What are the new amendments made to EPF & EPS schemes?

Below are the amendments/changes made to EPFO’s EPS scheme in August 2014. (EPFO is Employees’ Provident Fund Organisation)

  • EPF a/c is mandatory if your salary is less than Rs 15,000 pm. Previously this amount was limited to Rs 6,500 pm. (The definition of SALARY for EPF calculation is : Salary = Basic + Dearness Allowance)
    • Latest Update (01-Mar-2019) : As per the Supreme Court judgement, employers cannot segregate ‘special allowance’ from basic wages for purpose of PF deductions.
    • Cash allowances (dearness allowances) including but not limited to travel allowance, canteen allowance, special allowance, management allowance, conveyance allowance, education allowance, medical allowance, special holidays, night shift incentives and city compensatory allowances to employees are part of ‘basic wages’ for calculation of Provident Fund contributions.
  • As mentioned above, you contribute certain portion of your monthly salary towards EPS (Pension). You receive the pension amount from this Employees’ Pension Scheme. The minimum pension to a pension holder is now decided as Rs 1,000 pm.
  • The EPF’s account holder can nominate any family member as a nominee. On any unfortunate event (on death), the family member of the EPF subscriber will receive Rs 3 Lakh as insurance coverage. Previously this was around Rs 1.56 Lakh only. (Do not forget to inform your nominee about this provision).
  • The minimum contribution used to be 12% of Rs 6,500 in most of the employees’ cases, now this is 12% of Rs 15,000 pm. So, you may now be depositing Rs 1,800 towards EPF. Whereas, you employer may now be contributing Rs 550 pm and Rs 1,250 pm towards EPF and EPS (pension) respectively.

Kindly note that the above figures are for minimum contributions. Check your pay-slip or EPF statement to know about your employer’s and your contribution percentages.

Understanding the components/sections in EPF online Statement: Above is the latest EPF online statement (Sep 2012 to Dec 2014) that I have received from my friend. Let us understand the different sections available in EPF statement.

  • The first column (PARTICULARS) gives you the particulars of month-wise contributions, interest updated date and about the executed PF transfers/withdrawals (if any)
  • The second column has two sections which gives you information about your employer’s and your share towards EPF deposit.
  • PF Withdrawals are listed under third column.
  • Your Employer’s contributions towards your EPS (pension) is provided here.
  • With reference to the above EPF statement, you can observe that Rs 780 and Rs 239 (12% of Rs 6500 pm) used to be employer’s and Employee’s contributions towards EPF account. These are now (after September 2014) changed to Rs Rs 1,800 and Rs 550 pm respectively.
  • Employer’s contribution towards EPS account used to be Rs 541 pm and now it is Rs 1,250 (from October 2014 onwards). (Suggest you to check your statements too and understand more about the EPF and EPS contributions).
  • You can observe that my friends has changed the company and had claimed EPF transfer online. The online EPF transfer details are also available in EPF statement.
  • You can also observe that there are transactions towards “Interest updated” in the statement as on 31st March of every year. These are the interest payouts on the total monthly contributions. There won’t be any interest payout towards EPS contributions.

How is interest on EPF account is calculated?

Before explaining to you about the calculation of interest on EPF deposits, let us understand few relevant points regarding the interest calculation.

  • The rate of interest is notified by the central government periodically (every fiscal year). The rate of interest on EPF deposits for last three fiscal years are : EPF interest rate in 2012-13 was 8.5%, in 2013-14 it was 8.75% and for this fiscal year (2014-15) too it is 8.75%.
  • Interest Amount is calculated on the average monthly balance. EPF subscribers are eligible to get interest amount on their contributions and employer’s PF deposits.
  • The interest amount is calculated monthly but the total interest amount is credited once a year only. The credit payout generally happens at the end of March.
  • The accounting year followed by EPFO office is from March to February.

Let us now understand how the interest is calculated on EPF deposits. Let us consider the same EPF statement as the one given above. My friend had joined in his first job in a Private Limited company in September 2012. His company contributes 8.33% of his Basic salary as “EPF deposit” (Rs 239 pm) every month and 3.67% towards the EPS scheme (Rs 541 pm). (The 12% is subject to minimum of Rs 6,500 in 2012-13). His contribution was 12% of Rs 6,500 which was Rs 780 pm.

Let me put all these figures in MS excel and calculate the total interest earned on EPF deposits from September 2012 to end of March 2013.

Let me now explain about the calculation part. In the month of September 2012 the interest amount was zero because the available EPF balance was zero in the month of August 2012.

In Oct 2012, Rs 7.2 was the interest earned for September’s monthly contribution. We need to consider September month end balance (Rs 1019) and EPF applicable interest rate ( it is 8.5% in 2012-2014) divided by 12 months (we are calculating monthly interest amount). We need to repeat these calculations till March 2013. The total accumulated interest was Rs 152 and was credited on 31/Mar/2013 (as shown in EPF statement).

The total interest amount of Rs 152 was added to April month’s balance, along with the monthly deposits. Even after the recent amendments to minimum contribution amount, the interest calculation procedure has not changed.

So, suggest you to try these calculations based on your monthly Provident Fund deposits and understand how is interest calculated on your Provident Fund Account. (Leave your query if you need any assistance).


Latest news (March 2021) : EPF interest rate for 2020-21. The Central Board recommends 8.50 % rate of interest to its subscribers for the year 2020-21. EPFO notifies 8.5% as interest Rate on EPF for the year 2020-21.

The previous FYs EPF interest rates are as below;

  • FY 2019-20 : 8.50%
  • FY 2018-19 : 8.65%
  • FY 2017-18 : 8.55%
  • FY 2016-17 : 8.65%
  • FY 2015-16 : 8.80%
  • FY 2014-15 : 8.75%
  • FY 2013-14 : 8.75%
  • FY 2012-13 : 8.50%

Income Tax Saving Benefits on EPF contributions: Only your (employee’s) contributions towards EPF account are eligible for Income tax deduction under Section 80 C of Income Tax Act. If you have contributed for 5 years in EPF then there is no tax deduction but for less than 5 years TDS (Tax Deduction at Source) is deducted for EPF amount withdrawals. Did you like reading this article? Did you find it informative? Do share this post with your friends. If you have any queries on EPF interest calculations, kindly leave your comment. Cheers! Continue reading : (Image courtesy of adamr at FreeDigitalPhotos.net)  

This post was last modified on July 10, 2023 6:13 pm

Sreekanth Reddy

Sreekanth is the Man behind ReLakhs.com. He is an Independent Certified Financial Planner (CFP), engaged in blogging & property consultancy for the last 14 years through his firm ReLakhs Financial Services . He is not associated with any Financial product / service provider. The main aim of his blog is to "help investors take informed financial decisions." "Please note that the views given in this Blog/Comments Section/Forum are clarifications meant for reference and guidance of the readers to explore further on the topics/queries raised and take informed decisions. The information provided, therefore, should not be viewed as financial, legal, accounting, tax or investment advice."

View Comments

  • Hey Guys, I have the same problem. My PF accumulations is not at 50 % after OB Adjustments.

    I have been planning to transfer my Accenture PF account to my current employer. Please suggest if I should initiate a transfer at this time or wait for these discrepancies to be corrected ?

    • Hey Avinas, even if you initiate the transfer request, it will be rejected by them with the comment "ECR under process".

    • Dear Avinas,
      Advisable to get the transfer done after sometime.
      Meanwhile, kindly check on this with your ex-employer as well!

  • Dearf Sreekanth,

    I have got multiple below mentioned entries in my PF passbook and a huge amount has been debited from my PF account what could be the possible reason? Appreciate your assistance.
    OB Adjustment- ( OTHER_APPENDIX_E )- AUTO ADJ
    TRRNO #~#3101504009013 MMYYY:42015 REJECTED AA
    EMP REQUEST

    Thanks,
    Wasim

        • I have received the amount which was deducted for 11 months as a cumulative amount on 4th of September. So the negative and positive makes equally now. But for the months which has been deducted it's still showing zero amount for 11 monthS and still my 28k is not added.

    • Hey Wasim, the same thing happened to me. However, I got a response from the EPFO team that the deducted amount will be credited to the pension balance from the PF balance soon after getting some approvals from their end. This happened due to their account discrepancies. There is no action needed from our end. So, no need to worry :-)

      • Hi Mounika, I have lost a lot of amount to OB Adjustment.. what to so?
        I am an ex-accenture employee.

      • Thank you for the info mounika. Nevertheless I have raised a grievance in EPFO portal and yes I contacted Accenture PF team. Awaiting there response.

          • Hey Ramesh, did you get some amount credited to your account this september 4th? I received half of my deducted amount on the said date. I'm assuming that the revision activity will be conducted probably the first week of every month. So, I think I'll be receiving the other half this october.

    • Dear Wasim,
      Looks like there is some 'rectification of accounting entries' going on.. not sure if this is a technical glitch.. Suggest you all submit a grievance request to the EPFO and also check with your employer(s).

      In case, you get a 'confirmed' information, kindly share it here, can be useful to other readers.
      Thanks!

  • Did anyone receive any reply for the OB adjustment deductions from the PF office??? Over 50,000 has been deducted from my account.

    • I received the reply that Employer (Accenture) had not deposited Pension Fund Contribution (Rs 1250 p.m. ) due to which money shall be diverted from PF to pension fund from Employer contribution and all entries will be corrected shortly.

      • I left Accenture company in 2019 and I see many entries with negative amount in all entries, should I raise a grievance request or it will be corrected automatically.

        • I left Accenture a couple of months back. I got the same response as that of Himanshu's for my grievance request. Looks like this has happened only to employees linked to Accenture. Is there anyone who is not linked to Accenture in any way?

  • I have also got same issue what Himanshu and Prateek have explained. I have raised grievance to the EPFO and it is also with Tushar Wankhede:)

      • Hi Mounika,
        I haven't got any revert as such. That's said I feel okay that I am not the only one who had this incident.

        I have raised a grievance on EPF grievance site.

          • Hey Deepak, have you initiated your PF withdrawal claim recently? I resigned from my job and have applied for the withdrawal and currently, its status is "under process".I'm just trying to figure out if this has happened only to people who have applied for the withdrawal.

          • Hi Mounika, I am currently working with Accenture, haven't initiated any withdrawal but the same happened with me, `50k got deducted from my PF Account on 16th Feb 2021. Have raised the same to Accenture Payroll and have also initiated a grievance with the PF department, awaiting a response.

      • Thanks Srikanth, however the wassapp number for Bandra is infact the landline number. Which is not reachable most of the times, rather always. The OB adjustment looks to happen for quite a few people as it seems. Please address. Thanks for being the voice.

  • Hi, I got multiple entries as OB Adjustment on 3rd Aug 20 as - ( OTHER_INTEREST )- INT AMT AUTO ADJ
    TRRNO #~#3101504009013 MMYYY:42015 REJECTED AA
    EMP REQUEST and amount of approx Rs 1 lakh is debited. Also the balance is now showing less by about Rs 2 lakh. What can be the reason?

  • Hello Srikanth.
    You have explained it very nicely. How the interest in PF is calculated after resignation and not in job for one year. Is it calculated on the total amount of PF or considering the last basic salary pf contribution amount.

  • I withdrew my EPF about 2 years ago but a year later I got this in my Particulars: I got a credit of this money in my employee and employer particulars.

    OB Adjustment- ( OTHER_APPENDIX_E )- CPE RECTIFICATION - SINGLE YEAR - TRANS RECEIVED AFTER SETTLEMENT - CB MISMATCH Employye 363,817 Employer74,705

  • Thanks for wonderfully explained step by step!
    There is only concern.. how it works when one changes organisation and transfer PF, how interest calculated on that years contribution? there is mismatch if i use same formula.

  • Hi Sreekanth.. Your Blog was really helpful. I got answers for all of my queries. Only one confirmation I need is----- My current balance PF balance is around 34,000. I will withdraw the amount strictly after retirement(easily after 05 years). The amount will easily be more than 50,000. Will i need to update PAN under KYC of PF?? Actually I am unable to update PAN details under KYC of PF due to name mismatch. Awaiting your response.

Share
Published by
Sreekanth Reddy

Recent Posts

ITR Belated vs Revised vs ITR-U – Which One Should You Choose?

Filing your Income Tax Return (ITR) is not just about meeting deadlines—it’s about choosing the…

April 29, 2026

Best Pension Schemes in India (2026) – EPS, NPS, APY Explained

Retirement planning in India is often misunderstood. Many people think any long-term savings or investment…

April 24, 2026

Property Valuation Guide: How Your Home Is Really Valued

You’ve probably seen the same property quoted at different prices. One person says ₹60 lakh,…

April 21, 2026

Moratorium Rule in Insurance – When Can Insurers NOT Reject Your Claim?

Buying insurance is easy. Getting your claim settled—that’s where the real test begins. For any…

April 15, 2026

Immovable Property Gifts Above ₹45 Lakh Now Under SFT: What Changes from 1 April 2026?

Gifting immovable property—like land, plots, or houses—is super common in India. Families often do it…

April 11, 2026

The ETERNAL Financial Planning Framework: A Practical Approach to Building Long-Term Wealth

Most people believe that investing alone is enough to create wealth. But in reality, many…

April 9, 2026

This website uses cookies.