EPF Calculator

The Employees’ Provident Fund is a retirement saving scheme to which both you and your employer contribute every month. Over a long career it often becomes the largest financial asset a salaried person has, built almost without noticing, because the contribution is deducted from the salary before it arrives. This calculator shows how large it could become, taking into account the raises you expect and the interest rate declared each year.

Who contributes what

The employee pays 12 percent of basic pay plus dearness allowance. The employer also pays 12 percent, but split in two. Of that, 8.33 percent of the basic pay, limited to a wage ceiling of 15,000, goes to the Employees’ Pension Scheme, a separate fund that pays a pension, and the rest goes to the provident fund. For someone with a basic pay above 15,000, the pension share is capped at 1,250 a month and the remainder of the employer’s 12 percent is added to the balance. The toggle in the page turns the pension share off if your employer does not use it.

How interest works

The Employees’ Provident Fund Organisation declares a rate every year. Interest is worked out each month on the running balance, at the yearly rate divided by 12, and credited as a total at the end of the financial year. Because credit is yearly, interest earned in a month does not itself earn interest until the year ends. The page follows this method, which is why the results differ slightly from simple compounding.

A worked example

The defaults are a 28-year-old with a basic pay of 40,000 a month, a yearly raise of 6%, a current balance of 1,50,000, an interest rate of 8.25% and retirement at 58. The balance at 58 is 2,65,62,914. The employee’s contributions are 45,53,752, the employer’s contributions to the fund 41,03,932, and interest accounts for 1,77,55,231 of the total. In the last year the monthly contributions are 26,008 from you and 24,759 from the employer. In today’s money, at 6% inflation, the corpus is worth 46,24,872. A 35-year-old on 80,000, with 8% raises, retiring at 60, reaches 4,21,51,800.

Why interest dominates

Over 30 years the interest is more than twice the contributions, because early contributions have decades to grow and later ones are larger. This is why raising your own contribution early, or starting a job with a provident fund sooner, has such an effect. It also explains why a lower declared rate has a large impact: a one-point drop reduces the final corpus noticeably, which you can test by changing the rate.

Tax on interest

Interest on the provident fund is generally tax-free, but there are limits. Interest on the employee’s own contributions above 2.5 lakh a year, or 5 lakh where the employer does not contribute, is taxable. The page does not apply this; if your contributions are large, see the current rules. Withdrawals before five years of service can also be taxed, which the page does not model.

Edge cases

The retirement age must be after your age now. A raise of zero keeps the basic pay constant. A balance of zero models a new job. If you contribute on the full basic pay, the page uses the full amount for your 12 percent but still caps the pension share at the 15,000 wage.

Limits

The interest rate is constant, though it changes every year. The page does not model gaps in employment, voluntary contributions above 12 percent, withdrawals, pension benefits or the minimum service for a pension. Treat the result as a guide.

Related tools

• PPF Calculator shows a voluntary tax-free account that you can add alongside the EPF.
• Gratuity Calculator estimates the other lump sum you receive when you leave a job.
• NPS Pension Calculator projects a pension account with market returns.
• Retirement and FIRE Calculator puts the fund into a full retirement plan.