How is the EPF calculated for 2023-24?

EPF for 2023-24 is calculated as follows:

Contributions:

• Employee contributes 12% of basic salary + dearness allowance (DA).
• Employer contributes 12% of basic salary + DA, but only 3.67% goes to EPF, and remaining 8.33% goes to EPS (Employee Pension Scheme).

Interest Rate:

• For 2023-24, the EPF interest rate is 8.25% per annum.
• Interest is calculated monthly but deposited yearly.

Calculation:

1. Calculate monthly contribution:

a. Monthly salary = Basic salary + DA

b. Employee contribution = 12% of total monthly salary

c. Employer EPF contribution = 3.67% of total monthly salary

2. Calculate interest:

a. Interest for each month = Opening balance * (Interest rate / 12)

b. Total interest for the year = Sum of interest for all 12 months

3. Calculate final balance:

a. Final balance = Opening balance + Total contributions + Total interest

Example:

• Monthly salary = Rs. 15,000
• Employee contribution = Rs. 1,800
• Employer EPF contribution = Rs. 550.50
• Interest for the year = Rs. 1,476.25
• Final balance = Rs. 21,826.75

Additional points:

• If an employee has a basic salary + DA of more than Rs. 15,000, the employer's contribution to EPF is capped at Rs. 1,800 per month.
• Employees can contribute more than 12% of their salary to EPF, but the employer's contribution remains capped at Rs. 1,800.
• EPF accounts become inoperative if no contributions are made for 36 months.