EPF earns 8.15% annual interest (FY 2025-26), fully tax-free. Employee contributes 12% of basic+DA, employer contributes 12% (3.67% EPF + 8.33% EPS). EPS capped at ₹15,000 basic.
EPF — Key Questions
What is the current EPF interest rate?+
The EPF interest rate for FY 2025-26 is 8.15% per annum, declared by the EPFO board and approved by the Ministry of Finance. This rate is fully tax-free and compounds annually. Historically the rate has ranged from 8.1% to 8.75% over the last decade, making it one of the best guaranteed tax-free returns available to Indian salaried employees.
How is EPF contribution calculated?+
Employee contribution: 12% of Basic Salary + DA per month. Employer contribution: 12% of Basic Salary + DA — of which 3.67% goes to EPF and 8.33% goes to EPS (Employee Pension Scheme). EPS contribution is capped at ₹1,250/month (8.33% of ₹15,000 ceiling). If Basic+DA exceeds ₹15,000, EPS contribution stays at ₹1,250 while EPF contribution continues on actual salary.
Can I withdraw EPF before retirement?+
Yes, with conditions: Full withdrawal allowed on retirement (age 58), resignation with 2+ months unemployment, or permanent departure from India. Partial withdrawal allowed for: marriage (50% of employee share after 7 years), medical emergency (up to 6 months wages), home purchase/construction (up to 90% after 5 years), education (50% after 7 years). Withdrawals before 5 years of service attract TDS and lose tax exemption.