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
Filing your Income Tax Return (ITR) is not just about meeting deadlines—it’s about choosing the…
Retirement planning in India is often misunderstood. Many people think any long-term savings or investment…
You’ve probably seen the same property quoted at different prices. One person says ₹60 lakh,…
Buying insurance is easy. Getting your claim settled—that’s where the real test begins. For any…
Gifting immovable property—like land, plots, or houses—is super common in India. Families often do it…
Most people believe that investing alone is enough to create wealth. But in reality, many…
This website uses cookies.
View Comments
Transferred mine pf from my previous to current organisation ,so i can see service details under Transfer detail section in PF passbook.
My question is suppose if i wan't to withdraw mine PF right now,will EPS calculated based on service in current organisation or combine(Previous + current) ?
like mine previous organisation 2 years and current 2,so after transfer of PF ,suppose if i am going to withdraw now ,will be calculated 2+2 = 4 years of service or 2 years only?
Dear Ritesh,
As you are employed and contributing to EPF, you can not withdraw PF balance in full.
Yes, your previous service period is considered when withdrawing or calculating the pension for EPS.
Do we need to credit interest to members who have resigned and not transferred/ withdrawn their PF balance and their age as on 11th November 2016 is 58 years or more
Dear Sudeep,
Going forward there won't INOPERATIVE EPF a/c concept, as interest payment will be done even to the dormant PF accounts. But, the official notification is yet to be released.
Dear sir,
Could you explain me about OB adjustment ?? [[OB Adjustment- ( AUTO APPENDIX BACK PERIOD )- IPR(Back Period) (2014-2015)-Contribution only]] what is mean by this sentence which is in bracket ??
Dear Dinesh,
I believe that OB stands for - Opening Balance. IPR stands for - Interest Processing.
What is the meaning of " OB Adjustment- ( AUTO APPENDIX BACK PERIOD )- IPR(Back Period) (2014-2015)-Contribution only" ...
and also my (employee) contributions and Employers contribution is not visible for a whole year. i.e. from 04-2015 to 03-2016. But this was visible in my EPFO Passbook when I viewed 2 months ago. Please help me to understand this, so that I can escalate if there is an issue in my accounts. Thanks
Dear Sri Man..I am not sure about this one. Kindly contact EPFO. Click here to post your grievance to EPFO.
Hi Sreekanth,
I have completed ~6.7yrs of service and would like to withdraw partial PF from my account. I wanted to know if this is possible and if so, what are the steps to be followed for it
Thank you,
Lavanya
Dear Lavanya ..Kindly go through this article : Loans & Advances on PF balance - Rules, options & guidelines.
I had a query. I am in the process of joining a new firm. The salary structure offered is with a PF contribution of 10% instead of the regular 12%. When I asked the HR about this, they say that as a Bank they are permitted to have a 10% contribution to PF instead of 12% and they dont participate in pension plan. Could you please confirm if this can indeed be the case? My readings of the rules indicate that banks dont have any such exemption. Please confirm. Thanks
Dear Ajay ..I believe that they are referring to NPS and not EPF.
(National Pension Scheme)
They show it as provident fund contribution and it is 10%.
Dear Sir,
I want to withdraw my pf balance of previous employer 5 years not completed ,so I have to fill 15G ,In column no. 16 (Estimated income for which this declaration is made ) total pf amount to be filled
1.Please help me how to calculate total pf amount to be write in this column (deposit amount in pf showing Employee share 26,321 ;Employer share 10,504 and pension contribution is 13,427.
2.In column no 17 of 15G( Estimated total income of the P.Y) :how to filled this if my my monthly inland salary is 20,500 and Yearly CTC is 3LPA.
3.and please explain me column no 19. of 15G identification number of relevant investment /account ;what is to be write in NATURE OF INCOME ;SECTION UNDER WHICH TAX IS DEDUCTIBLE ;AMOUNT OF INCOME
I m working in a private company and no other sources of income .
Dear Abhishek,
1 - Employee share + Employer share + interest amount can be shown.
2 - Your expected income + income from other sources + PF withdrawal amount.
3 - NIL (if no other sources of income).
Hi Shreekanth
Can you explain how the full PF withdrawals are calculated if one resigns and wishes to withdraw after more than two months on unemployment? Perhaps with an example? Especially with the EPS part.
Thanks
Dear Yuyutsu..I am unable to comprehend your query. Whatever the outstanding balance in EPF a/c and EPS, will be paid to the PF member.
EPS can be withdrawn if the service period is less than 10 years.
When we transfer amount from one company to another looks like that previous balance is not considered while calculating the interest. Interest is only compounded on the current companies PF balance. Can you throw some light on this.
Dear Sai..Interest is paid on the total accumulated balance, which is generally credited in the first quarter of FY.
@Sreekanth I agree to your point that Interest should be calculate on the total accumulated balance.
Lets consider the snapshot in which Amount transferred in April 2014 of amount 8728 & 2670 towards employee & employer share respectively.
From the month of May onwards Interest should be calculated on Total Amount i.e, Amount deposited by this company + transferred amount.
Whereas thats not the case Interest is calculated only on the amount deposited by this company. The transferred amount not calculated in Interest calculation.
In my case X amount transferred from my previous account in Jun 2013. I did not receive any interest on that amount till now.
From the cases i read it looks either my understanding is not right or there is a catch in the system from the time UAN comes into the picture as this problem I observed only after that, prior to that I transferred my PF from 3 more companies & there is no issue in interest calculation.
Dear Pradeep,
Hmmm..interesting! Suggest you to submit a grievance at EPFO portal, and do let me know if they have to say anything on this????
Hi Sreekanth
I have a two query
1) When you transfer EPF/EPS from one company to another does EPS does not get transfer.
Even in the screen shot you mention it shows as 0.
Do we need to submit separate request to transfer EPS amount.
2) Can we withdraw EPS amount without withdrawal of EPF & without changing the company.
Dear Ankush,
1 - It gets transferred but will not be reflected in your PF passbook (only number of service years will be carry forwarded and accumulated). Yes, form 10c.
2 - No.