EPF Calculator:Employees Provident Fund (EPF) is a retirement saving scheme in which you do not need to do much separately. Rather, it is managed by the Employees Provident Fund Organization (EPFO) throughout your employment. In this account, your money keeps getting deducted in the form of PF and interest also keeps getting added on the interest received on it. If you do not withdraw funds from this account unnecessarily, you can see its magic on retirement. This scheme can secretly give you such a huge corpus, which can help you live comfortably in old age. At the same time, this scheme also allows you to invest in any other retirement planning.
Able to take away all the stress of retirement
If we think from today till retirement, then a corpus of at least Rs 1.5 crore to Rs 2 crore is necessary. Employees Provident Fund (EPF) account can remove this tension of yours, if you keep investing in it in a disciplined manner during your job. You can calculate it according to your basic salary in a few minutes. In this scheme, the employee has to deposit a part of his salary, while the company also contributes the same amount as the employee contributes. The amount of contribution is decided according to the salary structure. Every year the government decides the interest on the amount deposited in this EPF account. Currently the interest rate on this is 8.25 percent per annum.
Account deposit rules
For EPF account, the employee has to contribute 12 percent of his basic salary and dearness allowance. The company or employer also contributes the same amount on its own behalf. Out of the company’s contribution, 8.33 percent goes to EPS i.e. pension fund. Whereas the company’s contribution in EPF is only 3.67 percent. In this way, by adding the amount of contribution of both, you can find out how much money will be deposited in the EPF account in a year.
EPF Calculator: Basic and DA should be Rs 25000 at the age of 25
Suppose your age is 25 years and by adding your basic salary and dearness allowance you get Rs 25000.
Employee Age: 25 years
Retirement age: 60 years
Basic Salary + DA: Rs 25,000
Employee contribution: 12%
Contribution from company: 3.67%
Annual Increment Estimate: 6%
Interest on PF: 8.25% per annum
Total contribution: Rs 55,99,680
Interest benefit: Rs 1,52,23,250
Fund on retirement: Rs 2,08,22,930 (about Rs 2 crore)
How is interest calculated?
Basic Salary + Dearness Allowance (DA) = Rs 25,000
Employee contribution to EPF = 12% of Rs 25,000 = Rs 3000
Company’s contribution to EPF = 3.67% of Rs 25,000 = Rs 917.50
Company’s contribution to EPS = 8.33% of Rs 25,000 = Rs 2082.50
Monthly contribution to EPF account = Rs 3000 + Rs 917.50 = Rs 3817.50
This amount will be deposited in the EPF account every month and the fixed interest rate on it will be credited to the account. According to the annual interest rate of 8.25 percent, interest will be given at the rate of 0.6875 percent every month but it will be credited on the last day of the financial year. Your pension is decided by the amount that goes into EPS.
