All You Need To Know About Employees’ Provident Fund 

Employees’ Provident Fund (EPF) is a retirement benefit scheme that provides financial security to salaried employees in India. Managed by the Employees’ Provident Fund Organization (EPFO), it is one of the largest social security schemes in the world with over crore contributing members.

EPF enables employees to save a portion of their salary every month towards their retirement. Both the employee and the employer make equal contributions to the fund each month. The contributions, along with accrued interest, are paid out to the member upon retirement or under specific withdrawal conditions.

In this blog, we take a comprehensive look at employees provident fund – its features, benefits, eligibility criteria, contribution process and other details that every working professional needs to know.

Key Features and Benefits of EPF

Retirement Savings Tool

The core purpose of EPF is to build a retirement corpus for salaried individuals. It inculcates the habit of saving regularly during one’s employment years to ensure financial security post-retirement.

Fixed Contribution Rate

The monthly contribution to EPF is fixed at 12% of the employee’s basic salary plus dearness allowance. This is equally shared between employee (3.67%) and employer (8.33%).

Interest Payouts

Interest is calculated on the cumulative balance in the EPF account and credited annually. The current interest rate is 8.15% per annum.

Tax Benefits

The employer’s contribution, interest earned and withdrawals are exempt from income tax, making EPF a tax-efficient investment.

Financial Security

The corpus can be withdrawn upon retirement or for specified expenses like higher education, marriage, home loan down payment etc. This provides financial security in times of need.

Monetary Assistance

Members can take advance from their EPF account for medical emergencies, unemployment or other monetary requirements.

EPF Contribution Process

Deduction of EPF by Employer

A member’s EPF contribution (12% of basic salary + DA) is deducted by the employer directly from the monthly salary. This is done for both the employee share (3.67%) and employer share (8.33%).

Credit to EPF Account

The deducted amount is credited by the employer to the member’s EPF account on a monthly basis. This is done by depositing the contributions with the EPFO within 15 days of the subsequent month.

Interest Accruals

Interest is calculated on the cumulative balance in one’s EPF account and added to the principal amount annually based on rates decided by the EPFO.

Tracking Contributions

Members can track their monthly contributions and account balance easily by logging into their EPF account online using the UAN number.

Withdrawal on Retirement

Upon retirement, members can submit a withdrawal claim with the EPFO to redeem the full EPF corpus including contributions, interest and other credits.

5 Advantages of EPF for Employees

  • Retirement Planning: It is because EPF can be considered as an effective retirement planning instrument, which adds in the corpus over all employment years.
  • Interest Earnings: The attractiveness of interest rates within the range of 8-8.5% makes up an opportunity for profit in investing by debt EPF.
  • Financial Discipline: The fixed deduction and savings habit ensure a disciplined approach towards saving that should invest regularly.
  • Monetary Assistance: It comes into consideration as members can apply for the advance before their retirement involving serious financial needs such as medical hardships, job loss cases etc.
  • Social Security: Insurance benefits under EDLI afford members and nominees extra social security.


EPF serves as a double benefit to the subscribers in terms of forced savings and attractive returns creating an easy framework for retirement provision. The forced deductions encourage investment habits from an early stage. Substantially and regularly increasing one’s contributions to the EPF, as well as their account balance will lead a stable life after retirement.