EPF Interest Rate 2024-25 – How to Calculate Interest on EPF

Table of Contents:
EPF Interest Rate	EPF Contribution	Calculate Interest on EPF
Interest on Inactive EPF Accounts	FAQs	Latest News on EPF Interest Rate

EPF Interest Rate

The EPF interest rate for the Financial Year 2023-24 is 8.25%

The EPF interest rate is reviewed every year by the EPFO Central Board of Trustees after consultation with the Ministry of Finance. The review of the EPF interest rate for a financial year is set at the end of that financial year (most probably in February but may go up to April or May).

The EPF interest rate for FY 2023-24 was also 8.25%

EPF Historical Interest Rates

Here is a brief overview of EPF interest rate history or EPFO interest rate history:

Year	EPF Interest Rates
2023 -2204	8.25%
2022 – 2023	8.15%
2021 – 2022	8.10%
2020 – 2021	8.50%
2019 – 2020	8.50%
2018 – 2019	8.65%
2017 – 2018	8.55%
2016 – 2017	8.65%
2015 – 2016	8.80%
2013 – 2015	8.75%
2012 – 2013	8.50%
2011 – 2012	8.25%
2010 – 2011	9.50%
2005 – 2010	8.50%
2004 – 2005	9.50% (9% Interest + 0.5% Golden Jubilee bonus interest)
2001 – 2004	9.50%
2000 – 2001	12% (April-June, 2001) and 11% (July 2001 onwards) on the monthly running balance
1989 – 2000	12.00%
1988 – 1989	11.80%
1987 – 1988	11.50%
1986 – 1987	11.00%
1985 – 1986	10.15%
1984 – 1985	9.90%
1983 – 1984	9.15%
1982 – 1983	8.75%
1981 – 1982	8.50%
1979 – 1981	8.25%
1978 – 1979	8.25% + 0.5% bonus (for members who did not withdraw any amount from their PF during 1976-1977 & 1977-1978)
1977 – 1978	8.00%
1976 – 1977	7.50%
1975 – 1976	7.00%
1974 – 1975	6.50%
1972 – 1974	6.00%
1971 – 1972	5.80%
1970 – 1971	5.70%
1969 – 1970	5.50%
1968 – 1969	5.25%
1967 – 1968	5.00%
1966 – 1967	4.75%
1965 – 1966	4.50%
1963 – 1964	4.25%
1957 – 1963	4.00%
1955 – 1957	3.50%
1952 – 1955	3.00%

EPF Contribution

EPF Contribution consists of two parts depending on the entity that makes the contribution – Employee’s contribution and Employer’s contribution.

The employee makes a contribution of 12% of basic salary + dearness allowance towards his EPF account. The employee has to make a lower 10% contribution in case the establishment has less than 20 employees or for industries such as (a) Jute (b) Beedi (c) Brick (d) Coir and (e) Guar gum Factories.

The employer makes a contribution of 8.33% towards the EPS (Employees’ Pension Scheme) account of the employee. Another 3.67% is added to the EPF account of the employee. The employer also makes 0.50% of contribution towards the EDLI (Employees’ Deposit Linked Insurance) account of the employee.

The employer has to pay an additional charge for administrative accounts at a rate of 0.50% with effect from 1st June 2018. The minimum administrative charge is Rs. 500 and if there is no contribution for a specific month, the employer has to pay a fee of Rs. 75 for that month.

How to Calculate Interest on EPF Balance

EPF interest is calculated every month but is deposited in the account at the end of the financial year. The following example explains the interest calculation on the EPF of the employee:

The following example explains:

1. The interest calculation on EPF of the employee or EPF interest rate calculation for a single employee 
2. The EPF Contributions by employee and employer

Example of calculation of interest for a financial year-

Basic Salary + Dearness Allowance = Rs. 15,000

• Employee’s contribution towards EPF = 12% of Rs. 15,000 = Rs. 1,800
• Employer’s contribution towards EPS = 8.33% of Rs. 15,000 = Rs. 1,250

Employer’s contribution towards EPF = Employee’s contribution – Employer’s contribution towards EPS = Rs. 550

• Total EPF contribution every month = Rs. 1,800 + Rs. 550 = Rs. 2,350

The EPF rate of interest FY 2024-2025 is 8.25%.

When calculating interest, the interest applicable per month is = 8.25%/12 = 0.687%

Assuming the employee joined service on 1st April 2024, contributions start for the financial year 2024 – 2025 from April

Total EPF Contribution for April = Rs. 2,350

Interest on the EPF contribution for April = Nil (No interest for the first month)

EPF account balance at the end of April = Rs. 2,350

Total EPF Contribution for May = Rs. 2,350

Total EPF contribution for May = Rs. 4,700

Interest on the EPF contribution for May = Rs. 4,700 * 0.687% = Rs. 32.289

*The interest will be calculated every month but will be deposited only at the end of the financial year (on 31st March 2025 in this case)

EPF Interest Rate for Inactive Accounts

In FY 2011-12, the EPFO had suggested to stop paying interest to EPF accounts in which negligible or no contributions are made for more than 3 years. However, this decision has been rolled back in 2016. 

Consequently, even the accounts which are lying inactive for more than 3 years will be credited with interest earned according to the existing rates. Nonetheless, you will not earn interest if your account has become inoperative i.e. after the end of scheme tenure; when you have attained the age of 58 and haven’t withdrawn the EPF balance.

Important Points to be Considered

Here a few key things that you need to know about EPF, EPS and EDLI:

1) Employees’ Provident Fund (EPF)

• The maximum wage ceiling for the calculation of EPF contributions is Rs. 15,000
• The employee can make contributions at a higher rate but the employer is not bound to pay at the higher rate
• The employee and the employer has to submit a joint request for making higher contributions in the EPF account
• The employer, however, will have to pay higher administrative charges (at the rate including 0.50% of the employee’s wage above Rs. 15,000)
• There is no wage ceiling (Rs. 15,000) for international workers

2) Employees’ Pension Scheme (EPS)

• The employer is not required to make the contribution when the employee reaches 58 years of age and is still in service
• The employer need not pay EPS contribution when the pensioner is drawing a reduced pension and re-joins as an employee
• The employee, who joins the service at an age of 50 or above and is not availing pension, does not have an option of not getting the pension contribution. The employee, or the employer, cannot say that the contribution should not be furnished as he will not be able to complete 10 years of service to avail pension benefits

3) Employees’ Deposit Linked Scheme (EDLI)

• The contribution to be made should be at a rate of the maximum wage ceiling of Rs. 15,000 even if the employee’s share is more than Rs. 15,000
• Each contribution is rounded off to the nearest rupee
• EDLI contribution has to be made even after the employee has completed the age of 58 years and should continue until the member is in service

Employees’ Provident Fund (EPF)

Employees’ Pension Scheme (EPS)

Employees’ Deposit Linked Scheme (EDLI)

FAQs on EPF Interest Rate 2024-25

Q. When is the EPF interest credited?

Ans. According to the specifications of The EPF Act of 1952, interest is credited to the member’s account as per the monthly running balances with effect from the last day of each financial year.

Q. Has EPFO hiked the interest rate on PF deposits for FY 2024-25?

Ans. According to the recent interest rate revision rolled out by the Finance Ministry, the EPF interest rate remains unchanged at 8.25% p.a. in FY 2024-2025 as the previous FY 2023-2024.

Q.Is EPF interest taxable?

Ans. Till the date of retirement, the EPF balance is exempted from tax payments. But, interest credited after retirement stands taxable as an ‘income from other sources. However, as per Budget 2021, if the deposits in EPF and VPF are more than Rs. 2.5 lakh in a financial year, then the interest earned on the contributions exceeding Rs. 2.5 lakh will be taxable. 

Q. What is the interest rate difference between EPF and PPF?

Ans. The current EPF interest rate for FY 2024-2025 is 8.25% whereas the rate of interest for PPF FY 2025-26 is 7.10%

Read more on PPF (Public Provident Fund) – Eligibility, Tax Benefits, Interest Rate 2025

Q. Will an individual get interest on PF after retirement?

Ans. An individual gets interest on EPF for up to 3 years post retirement. After 3 years of no contribution to the EPF account, it tends to become inoperative and won’t earn any interest.

Q. What are the withdrawal permissions from EPF amount including EPF interest under the rule?

Ans. Under normal circumstances, an employee can withdraw the principal amount including accrued interest upon retirement. Moreover, anyone above 54 years of age is allowed to withdraw 90% of the accumulated balance. Also, in case an individual remains unemployed for 2 months or more, he/she is entitled to withdraw the entire accumulated balance on that date.