The Employee Provident Fund (EPF) is India's premier government-backed retirement savings vehicle for salaried employees, offering attractive compounding returns with EEE tax exemption.
Calculate monthly EPF contributions, employer share, interest accumulation, and estimated retirement corpus.
EPF contributions are collected monthly. 8.33% of employer's 12% goes to EPS pension (up to ₹1,250), and balance 3.67% goes to EPF corpus alongside 12% employee contribution.
EPF is a government-backed retirement scheme managed by EPFO India. Employees and employers contribute 12% of basic salary every month, earning compounding annual interest.
Employee's 12% goes entirely to EPF. Employer's 12% is split into EPS (Pension Scheme: 8.33%, capped at ₹1,250) and EPF (remaining 3.67%). Interest is calculated monthly and credited annually.
Basic Salary ₹30,000/month over 15 years at 8.25% interest:
Compounding generates ₹7,96,710 in pure interest wealth.
Set annually by Ministry of Labour (currently 8.25% p.a.).
EPF enjoys EEE (Exempt-Exempt-Exempt) tax status up to ₹2.5 Lakh annual employee contribution.
Yes, interest on employee contributions exceeding ₹2,50,000 in a financial year is taxable as per Income Tax rules.
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EPF is a mandatory retiral savings scheme governed by EPFO. Both employee and employer contribute 12% of the basic salary every month, earning compounding annual interest declared by the Ministry of Labour.
The employee's full 12% contribution goes into the EPF account. Out of the employer's 12%, 8.33% (up to ₹1,250) is directed to the Employees' Pension Scheme (EPS) and the remaining 3.67% goes to the EPF corpus.
Employee with ₹40,000 monthly Basic salary contributing for 20 years at 8.25% p.a.:
| Calculation Component | Amount Value |
|---|---|
| Monthly Basic Salary | ₹40,000 |
| Employee Monthly Contribution (12%) | ₹4,800 |
| Employer Monthly EPF Share (3.67%) | ₹1,468 |
| Total Monthly Deposit to EPF | ₹6,268 |
| Total Contribution Invested (20 Yrs) | ₹15,04,320 |
| Estimated EPF Corpus at Maturity | ₹37,85,410 |
When an employer deposits 12% of basic salary towards PF, it is split into two distinct funds managed by EPFO.
First, ₹1,250 (8.33% of wage ceiling ₹15,000) goes to EPS pension. Second, the balance (3.67% of basic salary) joins your employee 12% contribution in the EPF passbook, accumulating monthly interest.
The Central Board of Trustees (CBT) and Ministry of Finance approved an 8.25% annual interest rate for EPF contributions.