EPFO News Alert: Employees’ Provident Fund Organization (EPFO) is transferring interest money to investors’ account. For the financial year 2020-21, the EPFO is getting 8.5% interest. It is better than FD,RD. In such a situation, if you are confused about how EPFO calculates interest, then we solve your problem. Now you will be able to calculate interest easily.
Example of calculation of interest for a financial year…
- Basic Salary + Dearness Allowance = Rs 15,000
- Employee’s contribution to EPF = 12% of Rs 15,000 = Rs 1,800
- Employer’s contribution to EPS = 8.33% of Rs 15,000 = Rs 1,250
- Employer’s contribution to EPF = Employee’s contribution – Employer’s contribution to EPS = Rs.550
- Total contribution to EPF every month = Rs 1800 + Rs 550 = Rs 2,350
- Interest rate for the financial year 2019-20 = 8.50 %
- When we calculate interest, the interest rate applicable for each month is = 8.50 % /12 = 0.7083 %
- Total contribution to EPF for the first month = Rs 2,350
- Interest on EPF contribution for April = Nil (No interest received in first month)
- EPF account balance at the end of April = Rs 2,350
- Contribution to EPF account in the month of May = Rs 2,350
- Total contribution in EPF account at the end of May = Rs 4700
- Interest on EPF deposit at the end of May = Rs 4700 X 0.7083% = Rs 33.29
- That is, at the end of May, you will get an interest of Rs 33.29 on the deposit. You can calculate the interest for the coming months using this formula.
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We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at businessleaguein@gmail.com
