EPF Calculator

In India, a retirement savings plan known as the Employees' Provident Fund (EPF) is managed by the Employees' Provident Fund Organization (EPFO). Since the program is needed for all qualified workers in the organized sector, businesses must register with the EPFO and make contributions to the EPF on behalf of their staff members.

Because the EPF is a contributing plan, both the employer and the employee must contribute a specific percentage of their base pay and dearness allowance to the fund. The current contribution ratios are as follows: the employer contributes 3.67% extra to the Employees' Pension Scheme (EPS) on top of the 12% basic salary and dearness allowance that the employee contributes.

Every month, the employee's EPF account receives the EPF contribution. Upon retirement or in certain other situations, such job loss, a medical emergency, or the purchase of a home, the employee may withdraw the EPF contribution and interest.

Employees can take use of several perks offered by the EPF plan, such as:

The EPF calculator is a simulation that estimates how much money will be in your EPF account when you retire. Together with the investment's accumulated interest, you may figure out the lump-sum payment, which comprises both your part and the employer's contribution.

Within the formula box of the EPF interest calculator, you can enter your age at present, your monthly base income and dearness allowance, your EPF contribution, and your retirement age (up to 58 years). If you are familiar with the numbers, you can also enter the current EPF balance. The EPF calculator will display the amount of EPF funds that will be available to you when you retire once you enter the required data.

Let's assume an employee's basic salary plus dearness allowance amounts to Rs 10,000. From this, the employee contributes Rs 1,200 (12% of Rs 10,000) to the EPF, while the employer contributes Rs 367 (3.67% of Rs 10,000) to the EPF and Rs 833 (8.33% of Rs 10,000) to the EPS. Therefore, the total contribution made by both the employer and employee to the employee's EPF account is Rs 2,400.

For the fiscal year 2023-24, the interest rate is 8.15%. Monthly interest is calculated at 0.679% (8.15% divided by 12).

Let's consider an employee who joined Firm XYZ in April 2019. For April, the EPF contribution is Rs 2,400, but no interest is accrued in this month.

Here are the steps to verify your PF balance:

1. Go to the official EPF website.

2. Choose your PF office location (state or regional branch).

3. Complete an online form, entering your personal details and the EPF account number from your payslip.

4. Double-check the information and submit the form.

Benefits of EPF:

1. Tax Benefits: Contributions qualify for tax deductions, and the interest earned is tax-free under section 80C.
2. Employer Contribution: Employers match the employee's contribution, enhancing savings
3. Financial Security: Provides security during critical illness, disability, or death; funds can be partially or fully withdrawn in emergencies.
4. Interest Earnings: Accumulated balance earns compound interest annually, ensuring substantial growth.
5. Ease of Withdrawal: Allows flexible withdrawals for specific purposes like home purchase, education, or medical emergencies.
6. Portability: Accounts are portable, allowing seamless transfer when changing jobs.
7. Social Security: Acts as a reliable source of income during retirement, reducing dependency on family or government aid.
8. Promotes Savings Habit: Encourages financial discipline and planning, fostering a savings culture among employees.
9. Nomination Facility: Allows nomination of beneficiaries, ensuring funds transfer to nominated individuals in case of the employee's demise.