What is the EPF?
EPF takes 12% of your basic salary and adds a matching 12% from your employer — a combined 24% of basic saved automatically every month. Of the employer's share, 8.33% is diverted to the pension scheme (EPS) on wages up to the ₹15,000 statutory ceiling, with the rest going to EPF.
The rate is declared each year by the EPFO Central Board of Trustees and approved by the government — 8.25% for FY 2025-26, the latest rate notified — and is tax-free under the EEE regime, which makes EPF one of the best risk-free returns available in India.
Formula & worked example
Contributions compound annually with the declared rate:
Balance = (Balance + contribution) × (1 + r)
Worked example: ₹50,000 monthly basic at age 30, retiring at 58, with 7% annual increments and 8.25% interest. You and your employer contribute ₹1.44 lakh in year one, rising each year. By 58 the corpus reaches roughly ₹3.19 crore, of which about ₹1.16 crore is contributions and the rest is compounding.
How to use this epf calculator
- Enter your current monthly basic plus DA.
- Set current and retirement age — the standard EPF retirement age is 58.
- Use a realistic annual increment; 6–8% is typical over a full career.
- The EPF rate is announced yearly and has ranged 8.1–8.65% recently.
Smart tips
- Never withdraw EPF when changing jobs. Transfer it — withdrawal resets the compounding that makes it valuable.
- EPF is EEE: contributions, interest and maturity are all tax-free, provided your own contribution stays under ₹2.5 lakh a year.
- VPF lets you contribute more than 12% at the same rate — one of the best low-risk returns available to salaried people.
- Withdrawals before five years of continuous service are taxable; after five years they are fully exempt.
Frequently asked questions
What is the current EPF interest rate?
The most recent declared rate is 8.25% for FY 2025-26, notified by EPFO in July 2026. The rate is declared once a year by the Central Board of Trustees and approved by the government, and has ranged between 8.1% and 8.65% in recent years — check epfindia.gov.in for the rate of the year you are in.
How much is deducted for EPF?
12% of basic plus DA from you, matched by 12% from your employer. Part of the employer share goes to the EPS pension scheme.
Can I withdraw EPF before retirement?
Partial withdrawals are allowed for housing, medical treatment, marriage and education after qualifying service periods. Full withdrawal is permitted after two months of unemployment.
Is EPF better than PPF?
EPF usually pays a slightly higher rate and includes employer matching, which PPF cannot match. PPF is available to everyone including the self-employed, with a ₹1.5 lakh annual cap.
Want the theory behind the numbers? Read our EPF guides on the Money Blog.
Written by Gurjeet Singh, Sharpen Solutions. Last reviewed 15 Oct 2026. Sources: Ministry of Labour & Employment — EPF interest of 8.25% for FY 2025-26, 239th CBT meeting (press release). How we check these numbers.