EPF Explained – How Your PF Money is Deposited & Calculated Monthly

PF- If you are employed, you should look at your CTC carefully. PF money is also deducted from your CTC. Every month 12 percent of your salary is deposited in the PF fund in the EPF account. Along with the employee, the employer (the company in which the employee works) also contributes to this fund.

Apart from retirement fund, EPF account has many other benefits. Most people do not have any information about these benefits. Today we will tell you about the benefits of EPF account in this article.

How is money deposited in EPF?

When you work in a company and your salary is fixed, 12% of it is deducted every month in EPF. Your company also contributes 12%, but a part of it goes to the pension scheme (EPS) and the rest to EPF.

Know the calculation

If your basic salary and DA combined is Rs 25,000, then every month Rs 3,000 (12%) is deducted from your salary in EPF. Your company also contributes 12%, but a part of it goes to the pension scheme (EPS). Out of this, Rs 1,250 (8.33% of Rs 15,000) of the company goes to EPS and the remaining Rs 1,750 is added to EPF. In this way, every month a total of Rs 4,750 (Rs 3,000 yours + Rs 1,750 company’s) is deposited in the EPF account. Every year, interest is also added on this amount by the government, which increases your savings further.

How much interest is being received in 2024-25?

The government decides the interest rate on EPF every year. This time the rate has been kept at 8.25%. This interest will be available on the money deposited from April 2024 to March 2025. Although the interest is calculated every month, it is added to your account together on the last day of the year. Talking about every month, dividing 8.25% by 12 gives approximately 0.688% interest.