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Retirement & Pension

Employees’ Provident Fund (EPF)

The salaried retirement default — 12% of you, 12% of your employer, at 8.25%.

8.25% p.a.EEE (with a high-contribution cap)

What is EPF?

EPF is the retirement backbone for salaried India. Every month you contribute 12% of your basic + DA, your employer matches it, and the balance earns a government-declared rate (8.25% for FY 2025-26), compounded yearly. It's an EEE product — contributions get 80C, interest is tax-free (up to a limit), and the maturity is tax-free after five years of service — making it a quietly powerful, low-effort retirement builder.

Interest rate
8.25% p.a. (FY 2025-26)
Contribution
12% of basic+DA by you, 12% by employer
Employer split
8.33% to EPS (pension) + 3.67% to EPF
Tax
EEE; interest on contributions above ₹2.5L/yr is taxable
Withdrawal
Tax-free after 5 years of continuous service

Calculate

₹
₹1,000₹10,00,000

Contribution = 24% (12% you + 12% employer)

Years
18 Years57 Years

EPF runs until age 58

%
0 %20 %
% p.a.
1 % p.a.12 % p.a.

EPFO rate for FY 2025-26 is 8.25%. Employer's 12% includes an EPS pension portion, so your EPF passbook may differ slightly.

EPF corpus at retirement
₹1.28 Cr
at age 58
Total contributed
₹42.05 L
Interest earned
₹86.11 L

Indicative only. Assumes a level 8.25% and a steady hike; actual EPF depends on the EPS split and rate changes.

EPF — The Complete Guide

14 questions answered — everything from eligibility and HUF/NRI rules to tax, withdrawals and edge cases.

The basics

How does EPF work?
If you're a salaried employee at a covered establishment, 12% of your basic + DA is deducted every month and your employer contributes an equal 12%. The money sits in your EPF account (linked to your UAN), earns interest each year, and is meant to be withdrawn at retirement — building a large corpus almost on autopilot.
How is the employer's 12% split?
Your full 12% goes to EPF. But the employer's 12% is split: 8.33% goes to the Employees' Pension Scheme (EPS) — capped at a ₹15,000 wage, i.e. up to ₹1,250 a month — and the remaining 3.67% goes to your EPF. So your EPF corpus grows on your 12% plus the employer's 3.67% (our calculator uses 24% and notes this caveat).
What is the UAN?
The Universal Account Number — a permanent 12-digit number that links all your EPF accounts across jobs. Once your UAN is activated and KYC-seeded, you can check your passbook, transfer your balance when you switch jobs, and withdraw online.

Interest

What is the current EPF interest rate?
The EPFO has declared 8.25% for FY 2025-26 — unchanged for the third year running. The rate is decided each year by the EPFO's Central Board of Trustees and notified after government approval. Interest is calculated monthly but credited to your account once a year.

Eligibility & contributions

Who must have EPF?
EPF is mandatory for employees earning basic + DA up to ₹15,000 a month at establishments with 20+ employees. Those earning above ₹15,000 can still be members (most are), by agreement with the employer. The self-employed and informal workers aren't covered — they can use PPF/NPS instead.
What is VPF — can I contribute more?
Yes. Through the Voluntary Provident Fund (VPF), you can contribute MORE than the mandatory 12% (up to 100% of basic + DA), and it earns the same 8.25%. The employer is not required to match the extra. VPF is a popular way for salaried savers to lock in a high, safe, tax-advantaged rate.

Tax treatment

Is EPF tax-free?
Largely EEE: your contribution qualifies under Section 80C, the interest is tax-free, and the maturity is tax-free — provided you've completed 5 years of continuous service. There is one important cap (below) on very high contributions.
What is the ₹2.5 lakh interest-tax rule?
Since April 2021, interest on your OWN EPF/VPF contributions above ₹2.5 lakh in a financial year is taxable (the threshold is ₹5 lakh if your employer does not contribute, e.g. some government funds). Contributions up to ₹2.5 lakh a year remain fully tax-free. This mainly affects high earners making large VPF top-ups.
What if I withdraw before 5 years?
Withdrawing before 5 years of continuous service makes the amount taxable — the employer's contribution and interest are taxed as salary, and any 80C you claimed on your own contributions can be reversed. TDS applies if the taxable withdrawal exceeds ₹50,000 (and you haven't submitted Form 15G/15H). Transferring — not withdrawing — when you change jobs avoids this.

Withdrawals

When can I withdraw my full EPF?
On retirement (age 58) or after two months of unemployment. You can also withdraw fully if you retire due to permanent disability. The corpus is paid with all accumulated interest.
Can I make partial withdrawals (advances)?
Yes — EPF allows advances for specific needs: buying/constructing a house, home-loan repayment, medical treatment, children's marriage or higher education, and during periods of unemployment. Each has its own eligibility (years of service) and limit.

Job change & pension

Should I transfer or withdraw when I change jobs?
Transfer, almost always. Withdrawing resets your "continuous service" clock (risking tax) and breaks compounding. With your UAN, transferring the balance to your new employer's EPF is a simple online request — keep the corpus growing and tax-free.
What is the EPS pension I keep hearing about?
The 8.33% that goes to EPS funds a monthly pension after retirement, payable from age 58 if you've completed at least 10 years of eligible service. The pension amount is modest (formula-based on pensionable salary and service), separate from your EPF lump sum.

Good to know

What happens to EPF on the member's death?
The EPF balance is paid to the nominee/family. Members are also covered by EDLI (Employees' Deposit-Linked Insurance), which provides a lump-sum insurance benefit to the family on the death of a member in service — at no cost to the employee.

Related tools & guides

Retirement calculator PPF NPS

Educational information only, not investment advice. Interest rates for government small-savings schemes are set by the Government of India and reviewed every quarter; bank FD/RD rates vary by bank and tenure. Figures are indicative — confirm the current rate and rules with the bank/post office before investing. Calculator results are for illustration purposes only. Actual returns may vary based on market conditions, fund performance, and other factors.

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