EPF Calculator: The Employees’ Provident Fund (EPF) is a retirement plan for individuals employed in the private sector. Employees on a salary in the organized sector receive its advantages. The management of it is done by the Employees’ Provident Fund Organization (EPFO). Both the worker and the organization (company) make contributions to the EPF account. This contribution amounts to 12-12 percent of the basic salary along with dearness allowance (DA).
EPF interest rates have been set at 8.25% annually
The government establishes the EPF interest rates annually. For the fiscal year 2023-24, the EPF interest rates have been set at 8.25 percent annually. EPF is an account where a significant amount accumulates over time until retirement. Imagine your basic salary (+DA) is Rs 12,000. If you’re 25 years old, by the time you retire at age 60, you could accumulate a retirement fund of approximately Rs 87 crore. This fund’s calculation relies on an annual interest rate of 8.25 percent and a typical 5 percent yearly salary increase. The numbers might alter if there are changes in interest rates and salary increases.
Employer’s 12% contribution, 8.33% is allocated to the employee’s pension account
12% of the employee’s basic pay (+DA) is credited to the EPF account. Nevertheless, the employer’s 12% contribution is made in two installments. From the employer’s 12% contribution, 8.33% is allocated to the employee’s pension account, while the remaining 3.67% is directed to the EPF account. Employees with a basic salary below Rs 15,000 are required to participate in this scheme.
EPF calculation for a 12,000 monthly salaried person
Basic Salary + DA = Rs 12,000
Current age = 25 years
Retirement age = 60 years
Employee Monthly Contribution = 12%
Employer Monthly Contribution = 3.67%
Interest rate on EPF = 8.25% per annum
Annual average salary growth = 5%
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