# How to calculate your employers EPF contribution

Understand how to calculate your and your employer’s contribution to the Employee Provident Fund (EPF).
How to calculate your employers EPF contribution
3 mins
24 November 2023

## EPF contribution

EPF contribution is divided into two parts.

### Contribution by you

• Male employees must contribute 10% or 12% of their basic salary.
• Female employees must contribute 8% of their basic salary for the first three years. Thereafter it becomes, 10% or 12% of the basic salary.

• Your employer must contribute an amount equal to 10% or 12% of your basic salary towards EPF.
• For female employees, the government contribution doesn’t change.

This basic rate of EPF is further sub-divided.

• Employee’s Provident Fund (EPF): 3.67%
• Employee’s Pension Scheme (EPS): 8.33%
• Employee’s Deposit Link Insurance Scheme (EDLIS): 0.50%

## How to calculate EPF contribution

This amount is calculated each month. To simply the math, assume that your basic salary is Rs. 25,000, including dearness allowance. Your contribution towards EPF is 12% of Rs. 25,000, which amounts to Rs. 3,000 each month. Your employer’s contribution towards EPF is 3.67% of Rs. 25,000, which comes to Rs. 917.50 per month.

• Your employer’s contribution towards Employee Pension Scheme (EPS) is 8.33% of Rs. 25,000, which comes to Rs. 2,082.50 per month.
• However, as per the norms, your employer can only contribute a maximum of 8.33% of the threshold amount of Rs. 15,000 towards your EPS. This means that your employer can only contribute a maximum of Rs. 1,249.50.
• So, the difference between what the employer can transfer and the maximum stipulated amount, in this case, Rs. 833 (Rs. 2,082.50 - Rs. 1,249.50), is transferred to your employer’s EPF contribution.
• So, your employer’s total EPF contribution becomes Rs. 2,915.50 as Rs. 833 is added to the initial amount of Rs. 2,082.50. As per EPFO guidelines, this amount is rounded off to the nearest decimal, making the total Rs. 2,915.

So, the total EPF contribution (by you and your employer) for a month amounts to Rs. 5,915 (Rs. 3,000 + Rs. 2,915).

## Information Needed to determine the EPF Interest Rate

The information below is needed to determine EPF interest:

• The current age of an employee.
• Current EPF balance.
• Monthly basic and dearness allowance of up to a maximum of Rs. 15,000.
• Percentage of contribution to EPF.
• Retirement age.

Each month, the EPF contribution is credited to the EPF account, and interest is calculated monthly. Nonetheless, at the conclusion of the fiscal year, the entire amount of interest earned will be credited. 8.15% is the interest rate for FY 2022–2023. Because of this, the interest rate for each month's interest computation will be 0.679%, or 8.15%/12.

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How much percentage is EPF deduction from salary?

The EPF deduction from salary is typically 12% of the basic pay.

Is EPF interest credited monthly or yearly?

EPF interest is computed monthly but it is credited annually.

Is the EPF interest rate fixed or variable?

The EPF interest rate can vary and is subject to periodic revisions by the government.

What is the method of crediting EPF interest to the subscribers?

EPF interest is credited to the subscribers' accounts by the Employees' Provident Fund Organization (EPFO).

Till what time will I get EPF interest in my account?

EPF interest is credited until the time you withdraw the EPF balance or close the account.

Will I face a loss when there is a delay in the updation of EPF interest in my passbook?

Delay in the updation of EPF interest in your passbook does not result in any financial loss.

Will I face a loss if I withdraw the EPF balance when there is a delay in the updation of EPF interest in my passbook?

Delay in the updation of EPF interest in your passbook does not impact the amount you receive upon withdrawing your EPF balance.