How the EPF contribution is built
An employee pays 12 per cent of basic plus dearness allowance into EPF every month. The employer pays the same 12 per cent, but splits it in two: 8.33 per cent of wages goes to the Employees' Pension Scheme and the balance of 3.67 per cent goes to EPF. The pension share is capped at wages of ₹25,000 a month from 17 September 2026, so the EPS instalment at the ceiling is ₹2,082.50 (rounded to ₹2,083 in the EPFO table). An employer also pays 0.5 per cent of wages as EDLI, which funds a life-cover scheme and does not land in the EPF balance.
The calculator offers two bases. On the capped basis, every contribution is worked out on ₹25,000 a month regardless of what the real wage is; this is the statutory minimum from 17 September 2026. On the full-wage basis, the 12 per cent applies to the real wage, the EPS share is still capped at the ₹25,000 ceiling, and the rest of the employer's 12 per cent is added to EPF. The choice can be made at the start of employment or by subsequent agreement, and some employers make it voluntarily. Existing higher-wage arrangements continue.
How interest is computed
Interest is computed each month on the running balance at one-twelfth of the annual EPFO rate, and the monthly amounts are added and credited once a year in the EPFO member passbook. The rate is announced by the Central Board of Trustees after its March meeting and ratified by the Finance Ministry. For FY 2025-26 the Central Board set 8.25 per cent at its 239th meeting on 2 March 2026; the calculator defaults to that number and lets you edit it.
A rate used for the past year does not hold for the future. The arithmetic on the page takes a single rate across the term you enter; a realistic run can repeat the calculation at a lower and a higher rate to see how sensitive the balance is to an EPFO board decision.
Worked example you can check
Take a wage of ₹25,000 a month in basic plus DA, age 30, retiring at 58, with contributions capped at ₹25,000 a month, 5 per cent yearly wage growth and 8.25 per cent interest. Each month the employee contributes ₹3,000, the employer contributes ₹3,000 in total, of which ₹2,082.50 goes to EPS and ₹917.50 goes to EPF. The EPF inflow each month is therefore ₹3,917.50; interest accrues on the running balance.
| Rule | Monthly figure at the ceiling |
|---|---|
| Employee share, 12 per cent of ₹25,000 | ₹3,000 |
| Employer EPS share, 8.33 per cent of ₹25,000 | ₹2,082.50 |
| Employer EPF share, the balance | ₹917.50 |
| EDLI on top (not in the EPF balance) | ₹125 |
Over 28 years at 8.25 per cent with 5 per cent yearly wage growth on the capped basis, the EPF balance reaches about ₹48,83,753. Your total contribution is about ₹10,08,000, the employer's EPF share about ₹3,08,280 and the rest is interest. The 5 per cent wage growth does not change the capped-basis result on this run, because the real wage already starts at the ceiling and the base stays at ₹25,000 regardless.
What happens when you cross the ₹25,000 ceiling
If the real wage is above ₹25,000 a month, the calculator's two bases give meaningfully different balances. The capped basis holds the contribution at ₹3,000 a month regardless of the wage. The full-wage basis lifts the 12 per cent employer share to the real wage, with the pension share still capped at ₹2,082.50 a month, so the EPF share grows with the wage.
| Wage | Basis | Monthly inflow to EPF | Balance at 58 (28 years, 5% growth, 8.25%) |
|---|---|---|---|
| ₹25,000 | Capped | ₹3,918 | ₹48.84 lakh |
| ₹50,000 | Capped (base held at ceiling) | ₹3,918 | ₹48.84 lakh |
| ₹1,00,000 | Full wage (starting inflow) | ₹21,918 | about ₹4.63 crore |
The full-wage basis is worth flagging for its tax rule. From 1 April 2021, interest on an employee contribution above ₹2,50,000 in a financial year is taxable each year. On a 12 per cent employee rate, that limit is reached at a wage of about ₹1,73,611 a month. The calculator notes it when the inputs put you past that number.
The 17 September 2026 ceiling change
Under S.O. 5109(E) dated 17 September 2026 and the Union Cabinet announcement that preceded it, the statutory wage ceiling for EPF, EPS and EDLI rose from ₹15,000 to ₹25,000 a month with effect from 17 September 2026. The 12 per cent employee rate and the 8.33 per cent EPS share continue unchanged; both now apply to a higher base. At the new ceiling, EPFO's FAQ table reports the employee share as ₹3,000 a month and the employer EPS at ₹2,083 a month with the employer EPF balancing head at ₹917 a month. Above the ceiling, contributions are generally restricted to the ceiling unless the employee contributes on higher wages under the scheme; EPS stays capped and the rest of the employer's 12 per cent goes to EPF.
The calculator projects forward from today at the new ceiling; it does not model the part-month split for September 2026 where the old and new bases met inside a single payroll cycle. With the Labour Codes in effect from 21 November 2025, a wider wage definition applies prospectively for new EPF accruals, and the base used on this page can change once an employer re-maps the salary structure. The arithmetic on this page is on a conventional basic plus DA base and does not model the Code's 50 per cent rule.
Tax, withdrawal and transfer
EPF is tax-exempt on withdrawal after five continuous years of service, counted across employers where the balance is transferred. Withdrawal before five years is taxable, with the employer's share and interest treated as salary and the employee's share allowed as a deduction already claimed. Under the new regime no deduction is available on contribution; the balance and its interest remain tax-free on qualified withdrawal. Interest on any employee contribution above ₹2,50,000 in a financial year is taxable each year, from the year it is credited.
EPS funds a monthly pension from age 58 subject to 10 years of service, computed as pensionable salary times pensionable service over 70 under the current formula. This page shows only the EPF side; the pension amount is a separate arithmetic that depends on wages and service after 15 November 1995. For a market-linked retirement approach, run the NPS calculator alongside this one.
What this calculator leaves out
- The monthly pension from EPS. The calculator shows EPF only; EPS has its own formula that this page does not model.
- EDLI, the employee deposit-linked life cover of 0.5 per cent of wages that the employer pays outside the EPF balance.
- Changes to the EPFO interest rate across the term. The rate you enter is held steady; a realistic run repeats the calculation at a lower and higher rate.
- A mid-career wage cut or a career break, where the base and the inflow would both fall.
- A VPF contribution that pushes the employee share above the statutory 12 per cent is approximated by lifting the employee percentage input; the two routes behave the same for arithmetic.
Frequently asked questions
What is the current EPF interest rate?
EPFO's Central Board of Trustees set 8.25 per cent for FY 2025-26 at its 239th meeting on 2 March 2026. Finance Ministry ratification was reported through 2026. The rate is reviewed once a year and may change; this page takes it as an editable input that defaults to 8.25 per cent.
How is the employer's share split between EPF and EPS?
The employer pays 12 per cent of basic plus DA. Of that, 8.33 per cent of wages up to the ₹25,000 ceiling goes to the Employees' Pension Scheme, so at the ceiling EPS receives ₹2,082.50 a month (rounded to ₹2,083 in the EPFO FAQ table). The balance of the employer's 12 per cent, which is ₹917.50 a month at the ceiling, goes to EPF.
What is the statutory wage ceiling for EPF?
₹25,000 a month with effect from 17 September 2026, under S.O. 5109(E) of that date. The previous ceiling of ₹15,000 a month applied from 1 September 2014 to 16 September 2026. The calculator uses ₹25,000 for every projection from today forward.
What does the 'full wage' basis do?
On the full-wage basis, the employee and the employer both contribute 12 per cent of the real wage. The employer's EPS share stays capped at ₹2,082.50 a month, that is 8.33 per cent of the ₹25,000 ceiling, so the extra employer money above that cap moves to EPF. This lifts both the EPF balance and the amount of annual interest.
Is interest on EPF taxable?
Yes, on the slice of the employee's own contribution above ₹2,50,000 in a financial year, the interest credited each year is taxable from that year, under rules added by the Finance Act 2021. For an employee on the 12 per cent statutory rate, the threshold is a wage above about ₹1,73,611 a month; the calculator flags this when the inputs cross it.
Does the Code on Social Security 2020 change EPF?
The Code is in force from 21 November 2025. It carries a wider wage definition that will apply prospectively once salary structures are re-mapped, which may change the base used for EPF calculations. The calculator does not model this prospective change; the figures are on a conventional basic plus DA base.
Is EPF withdrawal tax-free?
Withdrawal after five continuous years of service is tax-free, counted across employers where the balance is transferred. Withdrawal before five years is taxable at slab, with the employer's share and interest treated as salary. Under the new regime no deduction is available on contribution; the maturity still goes out tax-free when the five-year rule is met.
What is VPF?
Voluntary Provident Fund is a top-up where the employee contributes more than 12 per cent of basic plus DA. It earns the same EPF interest rate as the main account and has the same lock-in and tax rules. The employer is not required to match it; this calculator approximates a VPF top-up by lifting the employee percentage input.
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