EPFO Calculator: The Employees’ Provident Fund (EPF) is widely recognized as one of the most reliable retirement savings schemes available to salaried employees in India. This plan involves monthly contributions from both the employee and the employer. The government determines the annual interest rate for the EPF, which is currently set at 8.25% per annum. For individuals starting their careers at the age of 25 with a basic salary of Rs 15,000, it is essential to comprehend the total amount that will be accrued in their EPF account by the time of retirement.
The Central Board of Trustees (CBT) of the Employees’ Provident Fund Organization (EPFO) is scheduled to meet on February 28 to establish the EPF interest rate for the financial year 2024-25. Preliminary reports indicate that the interest rate may remain unchanged at 8.25%, consistent with the previous financial year, 2023-24.
Under the EPF scheme, employees can contribute a maximum of 12% of their basic salary and dearness allowance (DA), with employers matching this contribution. Of the employer’s total contribution, 3.67% is allocated to the EPF, while the remaining 8.33% is directed towards the Employee Pension Scheme (EPS). To illustrate the potential growth for an individual earning a basic salary of Rs 15,000, we will analyze the EPF calculations.
If an individual commences employment at the age of 25 with a monthly basic salary of Rs 15,000, they will contribute 12% of their salary to the EPF. Assuming a 5% annual increment in salary, this contribution will continue until the individual reaches the age of 60.
Indian this scenario understand the calculation
Employee’s contribution (12%) = Rs 25,47,574
Employer’s EPF contribution (3.67%) = Rs 7,78,883
Employer’s EPS contribution (8.33%) = Rs 17,68,691
Total EPF contribution (employee + employer = 15.67%) = Rs 25,47,574
Interest on EPF (at 8.25% p.a. interest rate) = Rs 75,81,663
Total balance (contribution + interest) = Rs 1,01,29,237.