EPFO: If you are also an employee then this news is for you. Let us tell you that in this benefit scheme of EPFO, people with 10,000 basic salary will get Rs 67 lakh on retirement… Read the full news to know the details related to this update.
EPF Calculation: Employed Provident Fund (EPF) is a retirement benefit scheme for private sector employees. Contribution is made on behalf of both the employee and the company in the EPF account. This contribution is 12-12 percent of the basic salary (+DA). EPF interest rates are fixed every year by the government. The interest rate of EPF for the financial year 2022-23 is 8.15 per cent per annum.
Employees’ Provident Fund Organization (EPFO) manages the EPF account. EPF is such an account, in which gradually big corpus is formed till retirement.
30 years of age, ₹ 10,000 basic salary-
Suppose basic salary (+DA) is Rs 10,000 and age is 30 years. Retirement age is 58 years. In this way you have 28 years for contribution. According to the EPF calculator, on this basis, when PF is calculated till retirement, a fund of about 67 lakhs will be prepared. In this, 10 percent annual salary increment has been included every year.
EPF Calculation: Understand this way-
- Basic Salary+DA= ₹10,000
- Current age = 30 years
- Retirement age = 58 years
- Employee monthly contribution = 12 percent
- Employer Monthly Contribution = 3.67 percent
- Interest rate on EPF = 8.15 percent per annum
- Annual salary growth = 10 percent
- Maturity Fund at the age of 58 years = 67.75 lakhs (Employee contribution is 21.40 lakhs and employer contribution is Rs. 6.54 lakhs. Thus the total contribution is Rs. 27.95 lakhs.)
(Note: The annual interest rate for the entire year of contribution is 8.15 percent.)
Understand the details of EPF contribution-
12 percent of the employee’s basic salary and dearness allowance (DA) is deposited in the EPF account. But, the 12 percent amount of the employer is deposited in two parts. Out of 12 percent contribution of the employer, 8.33 percent amount is deposited in the employee pension account and the remaining 3.67 percent amount goes to the EPF account. It is mandatory for employees whose basic salary is less than Rs 15,000 to join this scheme.
How is interest calculated?
Interest calculation is done on the basis of money deposited in the PF account every month i.e. monthly running balance. But, it is deposited at the end of the year. According to the rules of EPFO, if any amount is withdrawn during the year from the balance amount on the last date of the current financial year, then the interest for 12 months is deducted from it. EPFO always takes the opening and closing balance of the account. To calculate this, the monthly running balance is added and multiplied by the interest rate/1200.
(Disclaimer: The EPF calculation fund here is approximate. The figures may change due to change in interest rates, reduction in retirement age or change in average annual salary growth.)
