EPF (Employees’ Provident Fund)

What is EPF?

Employees’ Provident Fund (EPF) is the core component of the Provident Fund scheme managed by the Employees’ Provident Fund Organisation (EPFO). It involves monthly contributions from both employee and employer towards the employee’s retirement corpus.

Key Features:

Contribution: 12% of Basic + DA by both employer and employee.

Split:

• Employee’s 12% goes entirely to EPF.
• Employer’s 12% splits into EPF (3.67%), EPS (8.33%), and EDLI (0.5%).
• Interest Rate: Compounded annually, currently around 8.25%.
• Withdrawal: Partial or full, based on service duration and purpose.
• Portability: Linked via UAN, ensuring continuity across employers.

Example

Rohan contributes ₹2,400 monthly, matched by his employer. His balance earns annual interest and is available at retirement or job change.

Why EPF Matters:

It builds a secured retirement corpus, offering stability, liquidity, and tax-free growth for employees.