EPF Interest Rate Calculation: An employee contributes 12 per cent of his/her Basic Salary and Dearness Allowance (DA) while the employer contributes 8.33 per cent towards the Employees’ Pension Scheme (EPS) and 3.67% towards Provident Fund (EPF) scheme in the employee’s account every month.

So it is important for an employee to calculate the interest rate on his/ her Provident Fund. Though the interest rate on EPF is calculated on a monthly basis, the amount is deposited in the account of the subscriber at the end of the financial year. Currently, the government offers an interest rate of 8.65% on EPF while it was 8.55% earlier. According to the EEPFO rules, the interest is credited to the member’s account on monthly running balances basis with effect from the last day in each year.

Also Read: Provident Fund (PF) Balance online: Steps to check your EPFO account balance Online

Here are the details:

You can calculate your EPF Interest here:

Suppose your Basic + DA is Rs 30,000 and the interest rate = 8.65%. The monthly applicable interest here will 8.65/12 = 0.721%

Employee contribution to EPF will be equal to 12% of Rs 30,000 = Rs 3,600

Employer contribution will be = 3.67% of Rs 30,000 = Rs 1,101.

Hence, the total monthly contribution in your EPF account will be Rs 3,600+Rs 1,101 = Rs 4,701

If you joined your job on April 1, 2019, your contribution for FY 2019-2020 will start from this month itself. Here’s how your interest will be calculated for FY 2019-20:

April

PF Deposit in April = Rs 4,701. The interest earned will be 0 (no interest in the first month).
PF Balance at the end of April) = Rs 4,701

May

PF Deposit in May = Total deposit of April + May = 4,701 + 4,701 = Rs 9,402
Interest earned in May = 0.721% of Rs 6268 = Rs 67.78

June

PF deposit in June = Balance from previous month + contribution of June = Rs 9,402 +Rs 67.78 +Rs 4,701 = Rs 14,170.78
Interest earned in June = 0.721% of Rs 14,170.78 = Rs 102.17

Total balance at the end of June = Rs 102.17 + Rs 14,170.78 = Rs 14,272.95

For the rest of the months of the financial year, the interest will be calculated similarly. However, it will be deposited in your account at the end of the financial year in March 2020.