Provident Fund Calculator

Introduction

The Provident Fund Calculator is an online tool that allows you to calculate the EPF interest you will receive from the central government until you retire. A pension fund calculator is an investment valuation tool that helps you estimate your investment in a corporate pension plan. The PF Amount Calculator not only helps you calculate the interest on your PF, but it can also estimate how much credit you will have in your employee reserve fund account when you retire.

A minimum contribution of Rs. 1000 is set as monthly pension amount for EPF account holders. You can also use the Pension Fund Calculator to calculate your pension fund contributions. The minimum employee contribution to the Provident Fund account must be 12% of base salary.

Provident Fund Calculator

The Employee Provident Fund or the EPF is a retirement benefits scheme for salaried employees in the private sector. The Employees Provident Fund Organisation (EPFO) manages the EPF. Any organisation or firm with 20 or more employees gets covered under the EPFO. The Employees Provident Fund Organisation operates three schemes.

• The EPF Scheme 1952
• The Pension Scheme 1995
• The Insurance Scheme 1976.

The employees who fall under the EPF scheme make a fixed contribution of 12% of the basic salary and the dearness allowance towards the scheme. The employer should also make an equal contribution to the EPF scheme. The EPFO Central Board of Trustees fixes the EPF interest rates after consulting the Ministry of Finance. The EPF Interest Rate is fixed at 8.1% for FY2024.

The employee would get a lump-sum amount at retirement, which includes the contributions of both the employee and the employer with the interest payments. However, 12% of the employer contribution does not go to the EPF account. Out of the 12% contribution, 8.33% goes towards the Employee Pension Scheme Account, and the remaining 3.67% goes to the employee EPF account.

It is compulsory for all employees who draw a basic salary of less than Rs 15,000 per month to become members of the EPF. You cannot opt-outopt-out of the EPF scheme once you become a scheme member. An employee can make an enhanced contribution up to a maximum of 100% of the basic salary to the voluntary provident fund. The employer will not match the contribution.

Key information to be put in PF calculator :

An employee should enter the following information in a PF interest calculator to know his/her PF interest:

• Current age of an employee.
• Current EPF balance.
• Age of retirement.
• Monthly basic pay.
• Monthly dearness allowance.
• Monthly EPF contribution in percentage.
• Expected salary increment.

 Money gets credited for me into an account. When can I withdraw it?

There are ways that you can navigate your way out of the mandatory 2 month waiting period, if you want your EPF amount immediately. Employees planning to settle abroad, or those who have landed jobs in a foreign country are eligible to receive PF withdrawal immediately after registration. You’ll need to submit proofs like a copy of your VISA or employment letter, as the case may be.

A lesser known waiver to the waiting period is that a female employee can withdraw her PF money if she is leaving service for the purpose of getting married. The proof for submission here can be your marriage certificate, or even your wedding invitation card. You can withdraw a portion of your EPF savings for the purpose of:

• Marriage or education of yourself, your siblings, or children.
• Addressing emergency medical expenses for yourself, spouse, children, or dependant parents.
• Repaying housing loans for a house owned by you, a spouse, or jointly by both of you. You can do this only after 10 years of service and contribution to EPF.
• Paying the costs of alterations/repairs to your existing home. You’ll need to have been in service and contributing for 5 years for alterations and 10 for repairs.
• If you’ve completed 7 years of service, you can withdraw 50% of your EPF contribution up to 3 times in your working life.

What is an EPF calculator?

The EPF calculator is a simulation, which shows you the amount of money that will accumulate in your EPF account at retirement. You can calculate the lump-sum amount, which includes both your contribution and the employer’s contribution, along with the accrued interest on the investment.

The EPF calculator has a formula box where you enter your current age, your basic monthly salary and the dearness allowance, your contribution to the EPF and your retirement age up to 58 years. You can also enter the current EPF balance if you know the figures. After entering the requisite information, the EPF calculator will show you the EPF funds available at retirement.

How does an EPF calculator work?

To understand how the EPF calculator works, let us have an example.

Employees basic salary + dearness allowance = Rs 14,000

Employees contribution towards the EPF = 12% * 14,000 = Rs 1,680

Employers contribution towards the EPF = 3.67% * 14,000 = Rs 514

Employers contribution towards EPS = 8.33% * 14,000 = Rs 1,166.

The total contribution by the employer and employee towards the EPF account of the employee = Rs 1,680 + Rs 514 = Rs 2,194.

The interest rate is 8.1% for FY 2024-23.

So the interest rate applicable for each month is:

8.1%/12 = 0.675%

Assuming the employee joined the Firm XYZ in April 2019. The total EPF contribution for April will be Rs 2,194. The EPF scheme will not pay any interest for April.

The total EPF contribution for the month of May = Rs 4,388 (Rs 2,194+ Rs 2,194). He receives an interest of Rs 4,388 * 0.70833% = Rs 31.08.

Similarly, the calculation is done for the subsequent months.

How to use the ClearTax EPF Calculator?

• Enter your current age by using the slider.
• Then fill the basic monthly salary and the dearness allowance up to a maximum of Rs 15,000.
• The minimum percentage of contribution to your EPF is 12%. You can increase the percentage by contributing to the Voluntary Provident Fund.
• Fill in the retirement age up to a maximum of 58 years.
• Add the current EPF balance if you know the amount.
• The ClearTax EPF Calculator will show you the EPF funds that will be available to you at retirement.

Benefits of using the ClearTax EPF Calculator

• The ClearTax EPF Calculator shows you the accumulated amount in your EPF fund at retirement. You get an idea of the retirement corpus, which helps you manage other investments in a better manner.
• You may use the ClearTax EPF Calculator to increase your contribution towards retirement. If you feel the corpus accumulated at retirement is not enough to meet your requirements, then increase the percentage of your contributions to get a bigger corpus at retirement.
• The ClearTax EPF Calculator is easy to use and shows the EPF corpus at your retirement in seconds.
• The ClearTax EPF Calculator helps you to plan your retirement. You can increase the contribution percentage if you want to retire at an early age. You get an idea of the EPF corpus at different retirement periods, which helps you get the finances for early retirement.

What must you know about EPF contributions?

• EPF contributions are not taken only from your salary. Your employer is also bound to make equal contributions to your EPF account every month.
• Employees must link the Aadhaar number and the bank account with the UAN.
• You can nominate anyone for your EPF account. In case of the account holder’s demise, the nominee will pay the account balance.
• You can change the nominee by submitting Form 2 to your company’s finance department or the EPFO department.
• About 8.33% of your employer’s monthly contribution (up to Rs 1,250) will be redirected to the Employee Pension Scheme (EPS). This will help you get a monthly pension once you retire and fulfil certain conditions.
• If you decide to quit your job and withdraw the balance from your EPF account once and for all, you will only be able to remove a portion of the amount based on the purpose of withdrawal. Some valid reasons are unemployment, retirement, purchase of land, purchase/construction of a house, renovating a house, wedding, education, repaying a home loan, and medical reasons.
• If you are a retired person and have had continuous employment for the last 10 years, you can withdraw 100% of the EPS account balance.
• In case, you don’t have continuous employment for the last 10 years, you can only withdraw money from the EPS account, according to the slabs based on your previous drawn salary as mentioned in the Table ‘D’ below:Number of Years of ServiceEligible Portion of EPS Withdrawal*11.0221.9932.9843.9955.0266.0777.1388.2299.33

*Effective from 10 June 2008 as stated by the EPFO website. Irrespective of the last drawn salary, the maximum salary considered for this calculation is Rs 15,000. Therefore, if your last drawn salary is Rs 42,000 and you have worked for eight consecutive years, the EPS amount you can withdraw is Rs 15,000 * 8.22 = Rs 1,23,300.

• You don’t have to withdraw the EPF contributions or close the account when you switch jobs. Just provide your UAN to the new employer. The new PF number created by your new employer will still be under your existing UAN.
• You must manually transfer the PF account balance from your previous employer to the PF account created by your new employer by filling Form 13. Alternatively, you can fill Form 11 to transfer the PF contributions to the new account automatically.
• You can check your EPF account balance, transfer request, claim status, request to withdraw, and raise grievances online using the EPFO portal or even on the UMANG app.