EPF Calculator – Employee Provident Fund (EPF) Calculator Online

EPF calculator: What is EPF or PF? How it is calculated

The Employee Provident Fund (EPF) is a retirement savings funds scheme under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. It is directly managed through the Employees' Provident Fund Organisation (EPFO). Under the scheme, an employee has to pay a certain contribution of their salary towards the scheme, while an equal contribution is made by the employer. On retirement, the employee gets a lump sum, which includes the contribution of self and the employer, besides interest on both.

At present, the EPFO maintains more than 29 crore accounts pertaining to its members, as per the Annual Report 2022-23.

What is EPF?

Also known as PF (Provident Fund), EPF is a retirement savings fund wherein both the employers and employees contribute to the retirement savings of the workers.

As per rules, employers who have 20 or more employees are required to have EPF accounts for their workers. However, organisations with less than 20 employees may also consider helping them with EPF accounts. The firms with more than 20 employees are mandatorily required to open an EPF account for employees, whose salary is less than ₹15,000 (including both basic salary and dearness allowance).

However, most organisations make this facility available for their employees, regardless of their salary. Also, now with the Universal Account Number (UAN) it has become easy to transfer the EPF corpus from one organisation to the other.

Under this scheme, an employee is required to contribute 12% of their basic and dearness allowance to the EPF. The employer also contributes the same amount and matches this payment. Of the total 12%, 8.33% is directed towards the Employee Pension Scheme, while 3.67% to EPF. It must be noted that the employee's total contribution (12%) goes directly towards the EPF.

As it offers a return guarantee, this scheme is one of the most popular retirement savings plans in the country, overseen by the Government of India. The interest rate on the contribution, which is set by the EPFO, is subject to annual fluctuations. For the financial year 2023-24, the EPFO increased the interest rate to 8.25% from the previous year's rate of 8.15%.

According to the latest data from the Ministry of Labour and Employment, the EPFO added 19.50 lakh net members in May this year. This was the highest since the first payroll data was issued in April 2018. Also, the year-on-year analysis highlights a growth of 19.62% in net member additions in comparison with May last year. The net payroll data for the 18-25 age group in May this year remained highest since the first payroll data was published, the ministry noted.

EPF scheme: Benefits

1. Tax benefits under Section 80C only apply to the employee's contribution and not to the employer's contribution with deductions of up to ₹1.5 lakh allowed annually from the gross total income.

2. The interest for the EPF account is paid on the contributions. Every financial year, the central government announces the interest rate. For FY23-24, the interest rate has been set at 8.25%.

3. EPF also has a lock-in period just like other tax-saving investments. A person's EPF account matures only at the time of their retirement. However, if a person leaves the job and stays unemployed for two months thereafter, they are eligible to close the account and withdraw the funds, as per reports.

4. Investments made into the EPF account are tax-exempt under specific conditions. People can check for all details regarding the same on the EPFO website.

5. Also, there is availability of partial withdrawals under the EPF scheme for specific purposes based on the eligibility criteria.

EPF calculator

This online financial tool showcases the total amount an individual is due to have in the EPF account at the time of retirement. By providing specific details, you can easily find out the exact total amount that has accumulated in your EPF account, including both employee and employer contributions as well as the interest that the investment has earned over the period of time.

To know that, you will be required to mention your present age, basic monthly salary, dearness allowance and monthly EPF contribution among other details. Also, there is an option to add the current balance in the EPF account.

EPF calculator: Benefits

1. It shows you the exact corpus you will have in your EPF fund at the time of retirement. This further aids in managing other investments.

2. Once you get to know the actual amount in your EPF, you can look forward to boosting your retirement contributions by investing in other options available.

3. The EPF calculator is easy to use and does the calculation for you in a few seconds.