How EPF contributions are split
| Who pays | Share of basic + DA | Goes to |
|---|---|---|
| You | 12% | EPF account |
| Employer | 8.33%, up to ₹1,250 a month | Pension scheme (EPS) |
| Employer | The rest of its 12% | EPF account |
EPS is worked out on a wage ceiling of ₹15,000, so for most salaried people ₹1,250 a month goes to pension and the rest of the employer’s 12% goes to EPF.
An example
With a basic salary of ₹30,000 at age 28, a 6% raise each year and the 8.25% rate, your EPF would grow to about ₹1,83,68,280 by 58.
Interest rate
The EPF rate for 2025-26 is 8.25%, the same as the year before. EPFO’s board proposes the rate each year and the finance ministry approves it. Interest is calculated on the monthly running balance and credited once a year.
Tax on EPF
- Your contribution counts under 80C in the old regime.
- Interest on your own contributions above ₹2.5 lakh a year (₹5 lakh where the employer does not contribute) is taxable.
- Withdrawals after 5 years of continuous service are tax-free.
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Questions people ask
What is the EPF interest rate for 2025-26?
8.25% a year, approved by the government in 2026.
Can I withdraw my PF before retirement?
Yes, partly, for things like a home purchase, medical treatment, education or marriage, and in full after two months without a job. Withdrawals before 5 years of service may attract TDS.
Is my employer's 12% fully in my EPF?
No. Up to ₹1,250 a month of it goes to the Employees’ Pension Scheme, which pays a monthly pension after 10 years of service, from age 58.