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)
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:
Before explaining to you about the calculation of interest on EPF deposits, let us understand few relevant points regarding the interest calculation.
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;
This post was last modified on July 10, 2023 6:13 pm
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View Comments
Hi Sreekanth,
If any employee is contributing in VPF then how the interest will calculate. Will entire contribution be invested in EPF or in the same proportion 15.67% in EPF and 8.33% in EPS ( which doesn't generate any interest ). If you share the excel sheet with VPF contribution that will be a handy tool for understanding.
Dear vishal ..As it is your (employee) contribution, the entire amount is invested in EPF.
How to contribute Voluntary Provident Fund if employee Basic Salary + DA = 20000 and he wants to deduct 100% i.e 20000 as VPF, please let me know the calculation of the same and how to make entry in ECR file.
Dear Jeet ..I do not have necessary expertise regarding Employer side of the EPFO Portal..
suppose my Basic salary is 45000/- P.M. My company has deduct Rs. 5400/- per month as EPF Contribution.
I want to Know what is my EPF Wages, EPS Wages and EDLI wages as per new format of ECR Unified Portal.
Kindly Help me.
I have applied for transfer of PF from my previous employer ( which maintain PF trust) to my new employer who maintain PF with EPFO.
My PF was transferred by previous employer by cheque to EPFO accruing interest upto feb. however the cheque is lost in transit. Now i am requesting my pevious employer to reissue the cheque.
Whether the interest will be recalculated till the date of issue of new Cheque or it will be old amount only and i will loss the interest amount for the in between period till the amount is actually credited to my new EPFO account.
Dear Suresh,
I believe that you will get interest for the entire period as the balance is not withdrawn and is still with EPFO / Trust.
You may check with your Ex-employer too!
Hi , I had worked in company where I know about UAN and balance pf which was around 44500 till 01st april 2016 and then my basic got increased and pf deducted 1200/month till september . I mean from april to sep it was deducted 1200rs /m and then I joined another company just for 18 days and left that . at there I gave my previous UAN but now that UAN has been cancelled becaused I have joined new company from oct month and till now there is new UAN with me ?
So this was the scenario .
Now I'm coming to the point that I need to withdraw whole PF (PF+PS) . IS this possible ?
or to which company I have to go to withdraw this . to my old one or to where I worked just for 18 days ??
Please repy asap
Dear RITESH,
If you are employed with a new company and contributing to EPF scheme again, you have to transfer old EPF accounts monies to the new one.
Read: How to consolidate multiple EPF accounts?
No sir , I just want to withdraw it so to which company i have to go to apply for that ?
Hi Sreekanth,
Thank you for the great details.
One question - I have left the job on April 2016 and now I wanted to apply for PF withdrawal. I know PF interest is credited in April 2017, so if I apply for PF withdrawal in March 2017, will the interest earned between April 2016 to Feb 2017 be paid to me along with the withdraw amount? Or Interest will be not be paid if I withdraw before interest is credited (April 2017)?
Dear Ashok ..I believe that interest will be paid till feb 2017.
Thank you for the confirmation.
Please send the excel calculator
Done :)
Thank you very much. much appreciated!
Hi Sreekanth,
Very nice and informative article. Would it be possible for you to share the excel calculator?
Done dear Vimal..
Nice article.....Could you pls share excel sheet
Done, dear mahesh..
I complete 10 years of service this month. I'm planning to withdraw pf amount for loan repayment. I'm eligible to withdraw entire employee and employer contributions. If I initiate the process for withdrawal in Apr'17 will I get the interest for the year 2016-17 also? I'm asking because the interest doesn't normally reflect in the passbook till June as per my previous year observation. Also the interest rate declaration for the currect year comes later (in the next financial year like MAy or June) right? So how would I get interest amount (for 2016-17) if I apply in April itself?
Dear Raghuma,
You can make only partial withdrawal if you remain employed and can not make full balance withdrawal.
Yes, interest payment for Previous FY is generally credited in May/June.
Read: EPF partial withdrawal rules & options.
hi sir,
i worked last year 20 march 2015 to 25 may 2016. in my salary in hand Rs.7500 total CTC 1.2 LAKHS Per annm, every month PF deducted Rs.777 in my basic salary. it is totaly how much i will get. still i am not apply for PF. so kindly help in this regard.
thanks
murali
Dear murali ..You can check your EPF pass book or SMS to know your PF balance.
Dear Sir, I transferred my EPF accumulated till Aug 2007 in Nov 2011 . I got annexure K as well . It got reflected in my new account ledger from 2013 . In new account I am getting interest amount only for new account funds , not for the transfered in fund. I raised 2-3 grievences but I was always get replied that they are working on it and will let me know once it will be done. Please let me know other alternate by which I can get updated interest amount correctly.
Dear Naval ..There is no other option but to contact the EPFO directly. You may escalate the issue.
What is the esclation matrix for esclating the issue? Seems no one cares for anything.
Dear Naval,
Visit this link..and click on concerned EPFO Zonal office link..