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EPF Interest Rates 2022: How to Calculate Interest on EPF

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Last updated – January 30th, 2022

Employee’s Provident Fund (EPF) is one of the safest investment instruments backed by the government. 

EPF is a debt-based investment method designed for salaried persons to encourage them to save for their future needs like child education or marriage and of course retirement.

EPF’s tax exemption benefit markets it more investor-friendly. You not only get tax exemption on your annual EPF contributions and the interest earned but the maturity amount is also tax-free.

The government of India decides the EPF interest rate after the consultation with the Central Board of trustees.

Let’s discuss everything about the EPF interest rate in detail.

Current EPF Interest Rate 2021-22

The EPF interest rates kept on fluctuating in between the year and at present, it has reached its 7-year low point. In 2012-13 also, EPF interest rates were slashed to 8.5%. 

The revised EPF interest rate is now 8.50%.

EPF Interest Rate Chart 

EPF was started in 1952 with an interest rate of 12%.  You can see all the iEPF interest rates issued by government from 1952 to till now.

Financial YearInterest Rate (%)
2021-22 (Current)8.5%
1978-798.25% + 0.5 % bonus*


  • For the year 1978-79,  0.5% bonus paid to the members who did not withdraw any amount from their EPF account during 1976-77 and 1977-78.
  • For the year 2000-01, the interest rate was 12% for the first quarter (April 2000 to June 2000), thereafter, from July onwards 11% was paid.
  • For the year 2004-05, the government announced a Golden Jubilee Interest Rate bonus of 0.50%.

You may also like to readLatest NSC interest rate

EPF Interest Calculator (How to Calculate EPF Interest Rate)

EPF interest rate is calculated every month but deposited at the end of the financial year. 

If you are calculating yourself in an excel sheet, you have to calculate interest every month but you will add the gross interest amount at the end of the financial year.

The current rate of interest is 8.50% p.a. for the year 2021-2022.

Let’s understand the formula with the example below.

Amit is working in a public sector company. He is 30 now and expected to retire at the age of 60. Amit’s gross salary (basic+DA) is Rs. 20,000. He has started contributing to the EPF from 1st April, 2019. Let’s calculate the interest on his EPF investment.

As per the guidelines, an employee can contribute up to 12% of his basic salary and DA to the EPF account. 

On the other hand, employers can also contribute up to 12% of the same which is further divided into 2 parts – 8.33% in Employee’s Pension Scheme (EPS) with a maximum limit of Rs. 1,250 and the rest of the amount in Employees Provident Fund (EPF).

I have divided the calculation in two parts –

#1. Calculate the EPF Contribution

Basic Salary + DA = Rs. 20,000

Employee’s contribution in EPF = 12% of 20,000 = Rs. 2,400

Employer’s contribution in EPS (subject to limit of 1,250) = Rs. 1,250

Employer’s contribution in EPF = (Total contribution – EPS share) = (2,400 – 1,250) = Rs. 1,190

Total EPF contribution every month = 2,400 +  1,190 = Rs. 3,590

So the interest of 8.55% would be calculated on the amount of Rs.3,590 (2,400 +  1,190).

Note: The interest is calculated only on the total EPF contribution, you can’t add EPS in that.

#2. Interest Calculation on EPF Contribution

Since Amit started contributing to EPF on 1st April 2019, we will calculate EPF on last year’s rate of interest that is 8.65%.

As you know the interest is calculated monthly (at the end of every month), we will divide the current interest rate with 12.

So, one month’s interest rate =  8.65%/12 = 0.7083%.

Interest accrued for April 2019 = 0 (no interest for first month)

(As per the EPF rules, you don’t’ get interest for the first month of contribution)

Interest accrued for May 2019 = (April contribution + May contribution) * rate of interest (month-wise)

= (3,590 + 3,590) * 0.7083% = Rs. 50.86

EPF Interest earned till May 2019 = Rs. 50.86

Similarly, you can calculate interest for every month’s contribution and calculate on a yearly basis.

I have calculated the EPF for 30 years that Amit will receive on his retirement at the age of 60. Assuming the average EPF interest rate would remain 8.00%.

EPF Interest Rate

He would be able to create a corpus of more than Rs. 85 lakh by contributing to EPF.

Check outSavings account Interest rate

PPF vs EPF Interest Rate 

PPF and EPF both are long term investment instruments but different in nature. EPF is for salaried employees while anyone can invest in PPF. 

There’s a big difference between interest rates of EPF and PPF. EPF’s current interest rate is 8.5% whereas on PPF investment you earn 7.1% annually.

Let’s see the major differences between both investments in the table below.

Rate of Interest(Present)8.50%7.10%
InvestorSalaried employees of the recognized organizationsAny individual
ContributorBoth employee and employerSelf
Minimum investment limit12% of the basic salaryRs 500 in a year
Maximum investment limitEmployee’s contribution – 12%Employer’s contribution – Rs. 1,250 (Max)Rs 1,50,000 a year
Lock-in periodTill retirement 15 years (can extend in a block of 5 years)

Also read – What is Salary Slip


#1. When is the EPF Interest Credited?

EPF interest is however calculated at the end of every month but it is added to the EPF amount at the end of the financial year. 

#2. EPF Interest Not Credited Yet, What to Do?

As per the EPF Act 1952, EPF interest should be calculated on monthly running balances and credited to the investor’s account at the end of the financial year. 

There are many news of EPFO delaying in crediting the interest to the account holder’s account. 

In case, it happens at individual level when you know that your colleagues have got the interest but that didn’t happen with you.

You should immediately escalate a grievance to the EPFO department. 

To register your complaint, follow the steps below.

EPF Interest Rate
  • Enter your UAN number, security code and click on enter details.
  • Enter your complaint details (you will also get the option to add written grievance document)
  • Submit your grievance.

The best part of this portal is that you can check the status of your grievance. Send reminder and track the progress on your complaint.

#3. How Much is EPF Contribution?

There are two types of contributions to EPF account – Employees contribution and Employer contribution.

  • Employee contribution – Up to 12% of basic salary+DA. 
  • Employer contribution – 12% of employee’s basic salary+DA (Rs. 1,250 goes to EPS and rest in EPF)

An employee can also activate VPF (Volunteer Provident Fund) and contribute more than 12% of his regular contribution up to 100% of basic salary plus DA.  

You don’t have to open any separate account, it is an extension of the EPF account. You can get this activated by asking your employer or HR. 

#4. When Can I Withdraw EPF Amount?

You can withdraw from your EPF account under special circumstances like –

  • Your children’s education
  • Marriage of yourself, your children or your siblings
  • Constructing or buying a home.
  • Medical emergencies.

There are certain conditions that you have to fulfill before applying for withdrawal.

  • Minimum 7 years of service completed
  • Maximum 3 withdrawals are allowed during the whole EPF investing period.
  • The maximum withdrawal is 50% of your total contributions.

However, there is no minimum service period required for medical emergencies. But you can withdraw up to 6x of your basic salary.

#5. How to Check the EPF Balance?

If you are contributing to EPF and want to check your EPF balance, then you have 4 options to check your EPF balance.

  • Using EPFO Portal
  • Sending an SMS – You can send SMS to 7738299899 and the message format should be like EPFOHO UAN ENG.  Here, UAN is your Universal Account Number (you can get from your employer if you don’t have) and ENG is the language in which you will receive the information.
  • By giving a missed call to 011-22901406
  • UMANG appClick on EPFO and then click on Employee Centric Services. Now you will get an option to ‘view passbook’. 


EPF is still a good investment option for salaried people even after slashed interest rates and you can’t forget the additional tax exemption benefits.

That’s all about EPF interest rate guys. 

I have shared all about the EPF interest rate in detail. If you still have some questions, ask me in the comments section. I will try to resolve your queries at earliest.


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