oxns2n16 Haw EPF (Emplayees’ Provident Fund) interest is calculate? You are here: Home / EPF and PPF / How EPF (Employees’ Provident Fund) interest is calculated? How EPF (Employees’ Provident Fund) interest is calculated? December 17, 2013 by Basavaraj Tonagatti — 447 Comments 4) (8) 2) info) «Lo Do you know how your Employees’ Provident Contribution will earn interest rate? How the interest will be calculated on your as well as your employer contribution? Let us discuss this issue today. Latest News- + New EPF Withdrawal Forms-Withdraw without employer signature + Check EPF (Employee Provident Fund) balance through Mobile Phone SMS + EPF Universal Account Number (UAN)-What it is? EPF contribution will be considered for Before proceeding, let us first understand how and in what way interest rate calculation. We all know that if BASIC+DA is less than Rs.15,000 (Effective from 1st September 2014) then both employer and employee contribution will be same. If it is more than Rs.15,000 then you have option either to have this investment or opt out of this investment. Below table will give you how your as well as employer contribution will be distributed if your salary is less than or equal to Rs.15,000. Salary for this purpose means Basic+DA. Employees’ Provident Fund (EPF) 3.679% Employees’ Pension Scheme (EPS) 8.33% Employees' Deposit Linked insurce Scheme (EDU) 0.50% EPF Admin Charges. 1.10% EDLIS Admin Charges 0.01% But if itis more than Rs.15,000 then it depends on the employer decision like how much your employer is also contributing. Below are a few options which usually followed. But do remember that whatever below option your employer may choose but EPS contribution is fixed as 8.33% and other contributions may change according to consideration. beptww basunivesh.com/2013112/7ihow-ept-omployees-providert-funcnterestis-calculated! a8oxns2n16 Haw EPF (Emplayees’ Provident Fund) interest is calculate? Option 1-Employer may contribute equal to your contribution, Option 2-Employer may restrict its share to Rs.15,000 only but your share as 12% of salary. Option 3-Employer may restrict your as well as its contribution to Rs.15,000 only. Coming back to the interest calculation method on EPF, lot of EPF members not aware that for EPF accounting year starts from March and ends on February but interest will be credited on April every year. EPF interest is yearly compounding but use the method of “Average Monthly Balance” calculation method, Let us take an example that Mr. Ajay joins the company on 1st June of 2012 with a salary (Basic+DA) as Rs.6,500 with no prior EPF balance in this account. I considered the current EPF interest rate of 8.50% for 2012-13. Below is the table which illustrates the cal ation method unt Rs.780 Rs.230 Rs.4,010 ‘No interest eamed as on ist hine balance is revo s.7=(Rs-1,019°8.5%/12) Balance as on ast July Is wuz s.780 ns.219 | Hs,10194Rs.a,019-Rs.2.038| Rs2.019. So thls amount only willbe considered butt not fis.2,038. Rs 44={Rs.2,038°8 55/12), Balance as on Ist ‘uget2 5.780 5.239 |ps.2,0384Rs.1,019-85,3,057| eae eis 5.22=(85.3 057°8.5%/12) Balance as on Ist Sep-12 s.780 1.239 |s3,057+Rs.1,019=Rs.4,076] aaah Rs 292{Rs.8,076°8.5%/12). Balance as00n Ist ocea2 5.780 5.239 |rs.o76iRs.1,019-85.5,005 ‘October is Rs.4,076. 5. 35=(R5.5 095°8.5%/12) Balance as on Ist Now-12 s.780 1.239 |p s,095+Rs.1,019=5.6.114] abeiai cae Rs A3-{R.6,124°8.5%/12). Balance as on Ist Dec2 5.780 ns.230 |s.6,1204Rs.1,010-R5.7,133| December is Rs.6.04 Jans s.780 209 |me7A30R.Lor9-neeasa| _IARS7-139°8.5%/22), Balance as on Ist Janjary isRs.7.133. Rs S8={Re.8 152°8.5%/12) Balance as on Ist Fobruary 1 s.8,152. _Rs.7,020 (Fotal Employee Contribution) #Rs.2,151(Total Employer Contribution}ss.250 (interest)-Rs. Rs.780 ns230—_|s.2,1524Rs.1,010-R5.9,171| 9,831 ‘The above balance at year end of Rs.9,431 will be considered as a balance for beginning of account year i. for Mareh 1st. ‘A few points to be noted- + Contributions will be shown by your employer based on the salary due, For example, September month salary will be payable on October. So the September month contribution will be shown as a contribution against October but not in September. Whether the payment will be in October month or not, + Interest will be rounded off to a nearest rupee. + In case of death claims, interest should be restricted to the month preceding the month in which death, occurred. Note-Do you know these recent changes in EPF rules? If no then visit “Employee Provident Fund (EPF)-Changed rules from 1st Sept 2014“. beptww basunivesh.com/2013112/7ihow-ept-omployees-providert-funcnterestis-calculated! 2128oxns2n16 Haw EPF (Emplayees’ Provident Fund) interest is calculate? sla) 6G) v wr ee) fe) ale Similar Stories... How to transfer PPF Account from Post Office or Bank to another Post Office or Bank? EPF (Employees’ Provident Fund) Interest rate for 2013-14 All about Publie Provident Fund (PPF) EPF Mobile App-Activate UAN and Check EPF Balance Salary definition for calculations of Gratuity, HRA, EPF and Leave Eneashment Basavaraj Tonagatti am a Certified Financial Planner by qualification and currently living in Bangalore. I am using this platform to spread knowledge about Personal Financial Planning. Hope you too join me in spreading this awareness :) Connect With Me: Facebook Googles Twitter Comments Saran kumar says March 20, 2016 at 7:08 PM Thave 7 and half years experience. I resigned my job on last month. Can i withdraw my pf money along with pension, Reply Basavaraj Tonagatti says March 20, 2016 at 8:39 PM Saran-NO, because read the recent changes at “4 EPF withdrawal changes effective from Feb 2016", Reply Vishwamurthy says March 31, 2016 at 8:32 AM Dear Mr.Basavaraj, Thanks for educating the non-finance officers. Twould like know, in EPF whether we get interest only for the month on annual basis? and beptww basunivesh.com/2013112/7ihow-ept-omployees-providert-funcnterestis-calculated! 326oxns2n16 Haw EPF (Emplayees’ Provident Fund) interest is calculate? is there any interest paid to the accumulated amount for the earlier accumulations? Reply Basavaraj Tonagatti says March 31, 2016 at 9:54 AM Vishwamurthy-You mean to say that whether there any monthly compounding or not. Not, it is not monthly compounding, Reply Surinder kaur says March 18, 2016 at 8:38 PM Hi I recently resigned nd want to know how to calculate aur what is the exact PF amount ill get. 700 monthly was the PF amount and i resigned after 2.5 yrs ie joining date was july 2013 and resigned 31 jan 2016 Reply Basavaraj Tonagatti says March 19, 2016 at 9:19 PM Surinder-Whether you checked your passbook online? The details will be available there. Reply Senthil says ‘March 15, 2016 at 2:55 PM Hi beptww basunivesh.com/2013112/7ihow-ept-omployees-providert-funcnterestis-calculated! anesowou2016 How EPF (Employees Provident Fund) interests calculate? Great info. Thanks a lot for sharing. Small clarification, I have been working for last 5 years. When I checked my passbook , no interest has been added till now. So how to get the exact balance as of now? Reply Basavaraj Tonagatti says March 16, 2016 at 10:22 AM Senthil-I don't thi ‘You re-check and if interest not added, then contact EPFO. Reply Basavaraj says ‘March 10, 2016 at 1:13 PM Hello, In EPF interest is paid monthly, quarterly or yearly? Reply onagatti says Basavaraj I March 10, 2016 at 4:58 PM Basavaraj-It is yearly. Reply Basavaraj says March 11, 2016 at 12:39 PM ‘Thank you Sir. Itis paid yearly but calculated on monthly basis as illustrated above Reply beptww basunivesh.com/2013112/7ihow-ept-omployees-providert-funcnterestis-calculated! 51128oxns2n16 Haw EPF (Emplayees’ Provident Fund) interest is calculate? Khushroo says ‘March 9, 2016 at 2:27 PM Hi So if [withdraw PF from my dormant account in March-2016 then do I get the interest (which is credited in April 2016) Please clarify Regards, Reply Basavaraj Tonagatti says March 9, 2016 at 2:42 PM Khushroo-If it is dormant account already then how can you get interest on it? Reply Santhosh says March 9, 2016 at 11:00 AM Hello Sir, I quit my previous company last year April which I worked for 9 years. am not working now and I decided to take my PF account. I came to know that I cannot. such case previously there was a rule that no interest will be paid for dormant accounts after 3 years. What will happen to it now since if I cannot take my money completely my account will remain dormant till age of 58. Will it earn any interest. Please clarify. hdraw complete amount now. In Reply Basavaraj Tonagatti says Mareh 9, 2016 at 1:13 PM beptww basunivesh.com/2013112/7ihow-ept-omployees-providert-funcnterestis-calculated! e126oxns2n16 How EPF (Employees Provident Fund) interests calculate? ‘Santhosh-There is no clarity on this part. But we have to wait and in my view, if you not withdraw then they credit interest. Reply amol chavan says ‘March 4, 2016 at 12:58 PM HiSir, Thave one query about pf amount. my father was working in small pvt Itd company 2oyears ago. for 15 years. I don't have his PF no. and UAN no. please guide how I know PF Status. Reply Basavaraj Tonagatti says March 4, 2016 at 5:17 PM Amol-I think you can contact his employer or regional EPFO. Reply ‘Shambhu prasad says March 5, 2016 at 10:41 PM ‘Maine ek company me Nov ‘1999 to February ‘2010 tak kam kiya, Mere PF Amount par kab tak Interest milega. Reply Basavaraj Tonagatti says March 5, 2016 at 10:51 PM Shambhu-Up to February 2010. Reply beptww basunivesh.com/2013112/7ihow-ept-omployees-providert-funcnterestis-calculated! 728oxns2n16 Haw EPF (Emplayees’ Provident Fund) interest is calculate? Manpreet Singh says March 2, 2016 at 9:46 PM. hisir 1. how much interest we get on pf ? 2, how much % tax they cut & on what amount govt cut tax ? 3. govt cut the tax after total amount including interest or excluding interest ? 4, Thad submit 15G form will it help me on ta , if not then please tell me the use of 15G form ? ‘Thanks Reply Basavaraj Tonagatti says March 3, 2016 at 10:07 AM Manpreet-1) Currently it is 8.75%. It changes every year. 2) Since this budget, there is ambiguity on this. You have to wait for few more days for clarity. 3) Same answer as above. lier post “EPF Withdrawal Ta ion-New TDS (Tax Deducted at Source) Rules, Kunal says March 2, 2016 at PM HL, I wanted to know if there is any difference between EPF & RPF? Is EPF interest paid or it just gets accumulated in our account & paid at the time of retirement Reply Basavaraj Tonagatti says March 2, 2016 at 7:35 PM beptww basunivesh.com/2013112/7ihow-ept-omployees-providert-funcnterestis-calculated! anesoxns2n16 epson Haw EPF (Emplayees’ Provident Fund) interest is calculate? Kunal-Some eligibility features are different. But no such difference in return and all. Reply ‘Manju says February 22, 2016 at 4:59 PM Hi Basavaraj, Twish to withdraw my EPF now in Feb 2016 , i have the below queries. Qu: Does i get the EPF interest till Feb 2016 or only till the last Financial Year ~ March 2015 Qe: My job has been terminated which is beyond the control of the member, hence TDS/tax should not be deducted as i have served for only 4.7 years and terminated by employer. I have joined a new company almost 2 years back and had earlier applied for EPF through employer, but the claim settlement has rejected and did not get the reason for rejection and also did not get the rejection letter dispatched. Q3 : Whom to contact for reason for rejection. Q4: Does the employer accept if we mention Reason for Leaving the service as ~ Terminated from Employer. ‘To withdraw EPF and avoid TDS/tax for EPF amount what all forms to submit — Is it Form 19 and 15G is enough or any other forms to submit, as the EPF amount is above 2.5 Lakhs. Q6 : Asi don't have Adhaar card and UAN for the earlier employer, can i submit the forms in regional EPFO office without Employer signature or can be submitted through employer only. Thave JAN for the current employer only. Q7: How much time will it take to get the EPF amount to my bank account now. ‘Thanks, Manju Reply’ a Basavaraj Tonagatti says February 22, 2016 at 5:23 PM ‘Manju-1) It will be up to your the withdrawal month, 2) Confusing statements. Need clarity. 3) Contact regional EPFO. 4)Yes. 5) Avoiding TDS does not mean that avoiding tax. 6) YES. 7) It may be around 20-30 days. thasunvesh,com/2014/12/7Ihow-