EPF / PF Calculator — FY 2026-27
Calculate EPF corpus at retirement — 8.25% interest (FY 2025-26 rate, government ratified)
8.25% for the Third Consecutive Year — Why EPF Still Beats Most Safe Investments
On March 2, 2026, the Central Board of Trustees (CBT) chaired by Union Labour Minister Mansukh Mandaviya recommended an EPF interest rate of 8.25% for FY 2025-26 — the third consecutive year at this rate. The Finance Ministry formally ratified this on June 18, 2026, with interest credited to over 7 crore subscriber accounts. Compare this: a bank FD offers 7–7.5%, PPF offers 7.1%, and the Senior Citizen Savings Scheme pays 8.2%. EPF at 8.25% beats most of these — with zero market risk, EEE tax status (exempt at contribution, growth, and withdrawal), and the backing of the Government of India. For a salaried employee, EPF is one of the best risk-free return instruments available — and it's mandatory for most.
EPF Contribution Split — Who Pays What
| Contribution Type | Rate | Goes To | Tax Treatment |
|---|---|---|---|
| Employee EPF | 12% of basic | EPF account (earns 8.25%) | Deductible u/s 80C (old regime) |
| Employer EPF | 3.67% of basic | EPF account (earns 8.25%) | Not taxable in employee's hands |
| Employer EPS | 8.33% of basic (max ₹1,250/month) | EPS pension fund | Not taxable; used for pension |
| EDLI (employer) | 0.5% of basic (max ₹75/month) | Life insurance fund | Insurance benefit; not EPF corpus |
When people say "employer contributes 12%," that 12% is actually split: 8.33% goes to EPS (Employee Pension Scheme) and only 3.67% goes to your actual EPF account. Only the EPF portion earns the 8.25% interest — the EPS portion funds your pension. For employees with basic above ₹15,000, EPS contribution is capped at 8.33% of ₹15,000 = ₹1,250/month.
The ₹15,000 Wage Ceiling — What It Means Practically
Under the EPF Act, the statutory wage ceiling for EPF is ₹15,000/month basic. This means:
- If your basic is ₹40,000, your employer must contribute at least 12% of ₹15,000 = ₹1,800/month (not 12% of ₹40,000)
- Many companies apply EPF on the full basic (higher contribution, better retirement corpus)
- You can opt out of EPF entirely if your basic exceeds ₹15,000 and you were never previously enrolled
EEE Status — Why EPF Is Tax-Efficient
- Exempt at contribution: Employee EPF deductible under Section 80C (old regime)
- Exempt at growth: Interest earned on EPF is tax-free
- Exempt at withdrawal: After 5 years of continuous service, withdrawal is fully tax-free
Exception: EPF contribution above ₹2.5 lakh per year (employee only) earns taxable interest from FY 2021-22 onwards. For most salaried employees with basic under ₹1,73,611/month, this threshold is not a concern.