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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This question is on PF contribution rate in companies with less than 10 employees.
Is it mandatory in this case to restrict employee contribution to 10% instead of normal 12%? Also, if the employee contribution is considered at 10% how is the EPS and Employer contribution split? will it be 8.33% and 1.67%. Please clarify
Dear Ramesh,
12% is mandatory.
Hi Sreeknath ,
How PF interest will calculate ,If a person working last 12 years in the same company .Suppose FY 2018 Accumulated balance is 5 lacks and FY 2019 each month contribution 14000 per month (8%+3.63%) will Interest call for amount 15.14 lacks like 514000*8.67/12 or 14000*8.67/12
Dear Sharanappa,
Interest will be calculated on the accumulated balance (Rs 5 lakh) as on previous month..Kindly refer to the table in the above article..
Related articles :
* EPF Interest Income & Withdrawals | Tax Implications | Is EPF Interest taxable?
* Tax Implications of EPF, PPF & NPS Withdrawals (Full / Partial) & Maturity proceeds
Kindly advise how to procure the Annexure-K Document from EPFO Office? Had raised the request through grievance (EPFiGMS) and requested them to send/share the copy on my registered e-mail id. But they did not provide one till date!
Please file an RTI..you may do so online as well. Sure shot way to get that.
Dear Debaditya,
Generally they do share it via email based on the Grievance request.
You may re-try submitting your request..
Dear Sreekanth,
Thanks for your reply. Have again raised a ticket today! Let's see what do they reply.
Hi Sreekanth! Fantastic Illustration. But as you know in case of EPF Transfer, the corpus gets realised immediately while the interest on the corpus being transferred in shown in the contribution for March. In this case, how is the interest calculated?
Dear Debaditya,
The interest gets accrued on the entire balance as per the prevailing interest rate(s)..
Dear Sreekanth,
Thanks for your reply! What my query precisely was, I transferred my EPF from A/c-1 (WBCAL00xxxxx0000000xxx) to A/c-2 (WBPRB00xxxxx0000000xxx) on 12/08/2016 which finally got transferred on 19/09/2016. Following is the entry of transactions :
"Cont. For 072016
Cont. For 082016
TRANSFER IN (Old Member Id-:WBCAL00xxxxx0000000xxx )
Cont. For 092016
Cont. For 102016
Cont. For 112016
Cont. For 122016
Cont. For 012017
Cont. For 022017
TRANSFER IN - INTEREST AMOUNT ONLY(Old Member Id-:WBCAL00xxxxx0000000xxx )
Cont. For 032017
Int. Updated upto 31/03/2017"
As you can see, the EPF corpus from A/c-1 is being shown in conjunction to the time of transfer and thus accrual of interest on it started with immediate effect. But the interest component on the EPF corpus (being transferred), is shown in March 2017, does this mean that accrual of interest on the Interest component (being transferred) will start from immediate effect from March 2017??
Furthermore, though my EPF corpus got transferred, but my EPS for A/c-1 is not transferred/shown in my A/c-2. It is still being shown in A/c-1. Does this mean that the EPS needs to be transferred separately??
Looking forward to your reply/advice!
Dear Debaditya,
EPF interest is shown only at the concerned FY year end.
Regarding EPS query, kindly read : What happens to EPS on Transfer of EPF account (or) when you switch Jobs?
Dear Sreekanth,
Thanks for the illustration/explanation. Will raise my query, if any, in future! Best wishes.
Can u explain ob adjustment- ( auto appendix back period ) IPR back period
Dear Kumar,
I am not very sure on this!
But found on the net that - You get this when your PF contribution was not updated automatically into your PF account but had to be manually done by the EPFO department.
You may check with your employer /EPFO.
Dear Sir
This is regarding my Balance Amount Not Getting From EPFO
When I have left the JOB after 2 month i have applied PF Form 19 for withdrawal
1st Time i have received PF Amount Rs,116171/- on 27/10/2018
and 2nd time i have received Amount was Rs,399328/-
and after 3rd time when i have applied it was rejected
Still my E-Pass Book Showing Balance amount 300206/- why i am not able to getting Balance amount what is the issue
Deposit
Withdrawal
Pension Contribution
Employee Share
Empolyer Share
Employee Share
Empolyer Share
604320
211385
380782
134717
42768
Balance amount i have to get Rs,300206/-
and when i have checked Miss Call Service EPFO 01122901406 AND 7738299899
BOUGHT the Sms showing Balance amount as per above
SMS Alart Showing as per below
Dear Member, Your UAN : *******,NAME : NAGARAJU,DOB : 23-05-1975, AADHAAR :Not Available, PAN : AE*******6B, Bank Details : Available, TOTAL BALANCE : 300206, LAST CONTRIBUTION : 803 (05-2017).
So It's Humble Request kindly advise and i have given my grivance two time
to EPFO They are telling their is no balance in my account
but how come my e-pass book and sms alert showing balance till date 26/12/2018
and know last month i have applied form 10c.
Regards
Nagaraju
Dear Sir
I have complied my service 19 1/2 years
Dear Nagaraju ji,
Form 19 is for full settlement.
How come you have been applying for full settlement multiple times?
If your service period is more than 10 years then you can not withdraw EPS balance. You will get pension from 58 years of age.
Kindly go through related article @ What happens to EPS on Transfer of EPF account (or) when you switch Jobs?
Thanks for reply sir
Sir as on today my E-Pass Book Showing BALANCE Amount and i am Getting SMS Also Form EPFO SMS ALERT
Sir Can i have your mobile no or Mail ID PLS
Dear Nagaraju ji,
That can be your EPS Balance.
You may request for Annexure - K from EPFO to go through all transactions done in your EPF account through this link..
Kindly note that I provide assistance through my blog only.
Sreekanth Reddy,
What would be EPS amount received if worked for 9.6 years. is it latest basic salary*9.33.
And how 9.6 years calculated if joined EPS in OCT 2009
Dear Babu,
Employees are eligible for EPS only if they complete 10 Yrs of service or attain the age of 58 or 50 Yrs of age.
You may kindly refer to this blog post..
Hi Sreekanth,
I recently changes jobs. The interest credit in the PF Account opened by my ex-employer is still pending.
Recently, I have submitted an online request to transfer my PF accumulation from the PF Account of my ex-employer to the PF Account opened by my new employer.
My question - Since the interest credit pending and if the transfer gets completed before the interest gets credited, will I loose the interest that I am entitled for.
Please advise.
Dear Aalok,
Is your previous EPF account administered by a Pvt Trust of your Employer?
If so, your previous employer will pay the accumulated interest on the Funds.
If it is maintained by EPFO, even then you will receive the accrued interest on your PF balance. Nothing to worry about!
Related article : What happens to EPS on Transfer of EPF account (or) when you switch Jobs?
If I withdraw my EPF in Sep-2018, I am assuming interest for FY2017-18 will be added and EPF balance will be transferred. when will the interest for Mar to Sep-18 paid to me? Will it be paid at all after the EPF Settlement?
Dear Murali,
Yes, interest will be paid even for the FY 2018-19 duration as well, based on the prevailing interest rate.
Thanks.
I had employee share balance of Rs. 7,60,424 (Rs. 7,05,646 balance as on 1.4.17 and Rs. 54,778 as int. updated up to 31.03.17). From Apr 17 to Feb 18, my contribution was 1800 per month (employee portion only). EPFO has given me an interest of Rs. 60,675 as on 31.03.18. When calculated as per your excel sheet example, there is much difference. Even only balance amount of Rs. 7,60,424 should fetch me an interest of Rs. 65,016 @ 8.55 per annum. Could you please analyse this and explain?
Actually EPFO should have calculated the interest the way explained here BUT they do not.
I file an RTI for their detailed calculation and come to know they eat up one month interest on each contribution. What happens is lets say you started working in anuary and your EPF will be credited in FEB. They will calculate the interest on opening balance. January interest would be zero obviously. For FEB they calculate interest ZERO as well as opening balance of feb is also zero and EPFO contribution would added on 1st Feb. This way you will get the interest for contribution for January salary in March only.
This is how they are cheating 5 Crore employees. But nobody complaints!
Thank you dear Manoj for sharing the above information!