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DDonnie · Your AI financial expertupdated Nov 12, 2026

Provident fund rate of interest: how much does your EPF really earn?

Key takeaways
  • The provident fund rate of interest recommended for 2025-26 for the Employees' Provident Fund (EPF) is 8.25% a year. [1] The EPF is employees' retirement savings, fed every month by part of your salary and by your employer. [5] The same rate was recommended for 2023-24 and for 2024-25. [2] [3]
  • EPF interest is calculated every month on your balance, at 8.25% ÷ 12, or 0.6875% a month, then added to your account once a year. [4] Example: ₹1 lakh (₹100,000) left all year earns ₹8,250.
  • Example: you put ₹2,350 a month into your EPF from age 25 to 58, and the rate stays at 8.25% a year. At 58, your EPF would be worth about ₹43.3 lakh, a sum that will buy less than today because prices rise.
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The EPF rate at a glance
QuestionAnswer
Recommended rate for 2025-268.25% a year [1]
Rates recommended for the two previous years8.25% in 2023-24 and 8.25% in 2024-25 [2] [3]
Who sets the ratethe central board of the EPFO (Employees' Provident Fund Organisation, the public body that manages the EPF) recommends it each year, then the government approves it [1]
Interest calculationevery month, balance × 8.25% ÷ 12, added to your account once a year [4]
What goes into your EPF each month12% of your basic salary, plus 3.67% of your salary paid by your employer [5]
Interest example₹1 lakh left all year earns ₹8,250
Capital example₹2,350 a month from 25 to 58, at 8.25% a year ≈ ₹43.3 lakh
1

Provident fund rate of interest: 8.25% for 2025-26

The provident fund rate of interest for the Employees' Provident Fund (EPF) recommended for the 2025-26 financial year is 8.25% a year. [1] The EPF is retirement savings for employees: every month, part of your salary goes into it, and your employer adds another part. [5]

Do you also contribute to the NPS (National Pension System), the public retirement plan open to all? Read our article on the pension the NPS will pay you.

  • The EPFO's central board recommends the rate each year: the EPFO is the public body that manages the EPF. [1]
  • The government then approves this rate, and the EPFO credits the interest to accounts. [1]
  • Example: ₹1 lakh (₹100,000) left in your EPF all year earns ₹8,250 (100,000 × 8.25%).
EPF rateRecommended on2025-268.25%2 March 20262024-258.25%28 February 20252023-248.25%10 February 2024
2

How to calculate EPF interest: the formula

EPF interest is calculated every month, on your balance, at 8.25% ÷ 12, or 0.6875% a month. [4] The interest for the 12 months is added to your account once a year, at the end of the financial year. [4]

### The calculation formula - Interest for the month = balance at the end of the previous month × 8.25% ÷ 12. - Interest for the year = the sum of the 12 monthly interest amounts. - A contribution earns from the following month: ₹2,350 paid in the last month of the financial year earns nothing in that financial year.

  1. Month 1: ₹687.50Example: your opening balance is ₹100,000 at the start of the financial year, and ₹2,350 comes in every month. Interest for month 1: 100,000 × 0.6875% = ₹687.50.
  2. Month 2: ₹703.66With the month 1 contribution, your balance goes up to ₹102,350. Interest for month 2: 102,350 × 0.6875% ≈ ₹703.66.
  3. Month 12: ₹865.22After 11 contributions, your balance is ₹125,850 (100,000 + 11 × 2,350). Interest for month 12: 125,850 × 0.6875% ≈ ₹865.22.
  4. End of the financial year: ₹9,316The 12 monthly interest amounts come to about ₹9,316. Your balance at the end of the financial year: 100,000 + 28,200 in contributions + 9,316 in interest = ₹137,516.
TipIn this example, the ₹28,200 you put in during the year earns only about ₹1,066: it comes in month by month. Your opening balance of ₹100,000, on the other hand, earns ₹8,250.
The word to know
Lakh : The unit used in India to count large sums: 1 lakh = 100,000. Example: ₹43.3 lakh is ₹4,330,000.
3

How much goes into your EPF each month: 12% + 3.67%

Every month, 12% of your basic salary goes into your EPF, and your employer also pays 12%. [5] Of your employer's share, 8.33% of the salary goes to your EPS pension (Employees' Pension Scheme), and 3.67% to your EPF. [5]

### Example with a basic salary of ₹15,000 - Your share: 15,000 × 12% = ₹1,800 a month. - Your employer's share for your EPS pension: 15,000 × 8.33% ≈ ₹1,250. - Your employer's share for your EPF: 1,800 − 1,250 = ₹550. - The total going into your EPF: 1,800 + 550 = ₹2,350 a month, or ₹28,200 a year.

These compulsory contributions are calculated on a salary of ₹15,000 a month at most. [5]

The word to know
EPS pension : A pension paid every month in retirement, funded by part of your employer's contribution. It is not added to your EPF balance. Example: out of ₹1,800 paid by your employer, about ₹1,250 goes to the EPS and ₹550 to your EPF.
Watch outOn 16 September 2026, the government approved raising the salary ceiling up to which the EPF is compulsory from ₹15,000 to ₹25,000 a month. [6] Example: today, an employee hired at ₹20,000 a month is not automatically enrolled in the EPF. Once the ₹25,000 ceiling is in force, they will be. [6] This ceiling is also used to calculate the EPS pension. [6]
4

EPF calculator: how much will you have at 58?

At 8.25% a year, ₹2,350 paid every month from age 25 to 58 gives about ₹43.3 lakh in your EPF. The tool on this page invests every month what is left of your income after your expenses. It starts from ₹30,000 net a month and ₹27,650 of expenses: that leaves ₹2,350, the EPF contribution in the example.

### The calculation, step by step 1. ₹2,350 a month is ₹28,200 a year (2,350 × 12). 2. From 25 to 58, you contribute for 33 years: 28,200 × 33 = ₹930,600, about ₹9.3 lakh. 3. The tool adds your contributions once a year, then applies 8.25%. At 58, your EPF would be worth about ₹43.3 lakh, including about ₹34 lakh of interest. 4. The tool then assumes you withdraw 4% of this capital each year: this is a calculation assumption, not an EPF rule. 43.3 lakh × 4% ≈ ₹1.73 lakh a year, or about ₹14,450 a month. As long as this capital earns at least 4% a year, it does not go down. In a year when it earns less than 4%, it shrinks.

  • These amounts ignore rising prices: in 33 years, ₹14,450 will buy less than today.
  • The rate is set every year: 8.25% for 33 years remains an assumption. [1]
  • The EPS pension is not counted: the tool sets the automatic pension at ₹0. Add it in the tool if you know it.
Watch outThis calculation is an example, not a promise. The EPF rate is recommended every year, and your salary will change: redo the calculation every year with your real figures.
?

Your questions

Is the EPF rate of interest the same for all employees?

Yes: the 8.25% rate recommended for 2025-26 applies to the accounts of EPF members. [1]

Does an EPF calculator give the exact amount?

No, it gives an estimate: the tool on this page, for example, adds your contributions once a year. So it gives a little less than the EPF, where each contribution earns from the following month. [4]

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Sources

  1. Dr. Mansukh Mandaviya Chairs 239th meeting of Central Board of Trustees (CBT), EPF · Press Information Bureau, Ministry of Labour & Employment · 2 March 2026
  2. Dr. Mansukh Mandaviya Chairs 237th meeting of Central Board of Trustees (CBT), EPF · Press Information Bureau, Ministry of Labour & Employment · 28 February 2025
  3. The Central Board Trustees (CBT) EPF recommends 8.25 % rate of interest to EPF subscribers for FY2023-24 · Press Information Bureau, Ministry of Labour & Employment · 10 February 2024
  4. Interest rate on PF accumulations since 1952, and paragraph 60 of the EPF Scheme, 1952 · Employees' Provident Fund Organisation (EPFO)
  5. Present rates of contribution · Employees' Provident Fund Organisation (EPFO)
  6. Cabinet approves enhancement of EPFO wage ceiling from Rs.15,000 to Rs.25,000 per month · Prime Minister of India · 16 September 2026

This article is for education only. It is not investment advice: investing carries a risk of loss.

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