 # How to calculate EPF Interest rate for different salaries?

Hi,

How to calculate EPF Interest rate for different salaries? What are the details required for calculation?

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Hi Manjunath,

EPF Interest Calculation is illustrated here below:

Employees basic salary + DA = Rs. 10000

Employees EPF contribution = 12% * Rs.10000 = Rs.1200 (A)
Employers EPF = 3.67% * Rs.10000 = Rs.367 (B)

Employers EPS Contribution = 8.33% * Rs.10000 = Rs.833

The total EPF contribution by the employer and employee = A + B = Rs. 1567

The interest rate FY 2020-21 is 8.5%.

Interest rate which is applicable per month = 8.5%/12 = 0.7083%

The EPF scheme interest starts from the subsequent month of the employment, i.e., if the employee joins in the month of January, the contribution will commence from the month of January but the interest from the month of February.

So, the contribution in EPF account will be

For January = Rs. 1567, and For February = Rs. 1567, summing up to Rs. 3134

Interest of EPF contribution for February = Rs.3134 * 0.7083% = Rs.22.19

The interest is calculated every month but is deposited in the account at the end of the financial year.

Hope the above helps.

Regards,
Bhuvana Anand

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