EPF Interest rate 2022

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EPF Interest rate 2022 Highlights

Know about EPF (Employees' Provident Fund)✔EPF interest rate✔EPF subscribers✔EPF account interest rate✔provident fund account✔provident fund interest rate


The Employee’s Provident Fund is a part of Government of India National Savings Scheme (NSS) for all the employees working for organizations that fall under the specific guidelines provided by the EPFO.

Under this scheme;

  • Employers and Employee make their specific contributions
  • The rate of interest is fixed at 8.65% per annum
  • The minimum wage requirement for this scheme is ₹ 15,000 per month
  • Organizations with over 20 employees are under a mandate to provide for this scheme

Scope of Contributions made by the Employee and the Employer

It is of much significance that the employees shall get the details regarding the scheme beforehand. The contributions made by both the employee and the employer are calculated on the basis of certain set of rules.

  • For women during the initial three years of employment, the contribution is 8%
  • In case there are lesser than 20 employees, the contribution is 10%
  • The standard contribution for a scheduled organization is 12%

The contribution from the employer’s end is divided in to two different schemes namely the Employees’ Provident Fund (EPF) and Employees’ Pension Scheme (EPS). However, the employee only contributes towards the provident fund.

How to calculate the interest rates applicable on the fund?

The Employees’ Provident Fund Organization rolls out the interest rates every year, which are applicable on the contributions made by both the parties. The interest calculation can be carried out in two different ways, one is the detailed step by step method and the other one is based on a simple formula.

Contribution (in terms of %):

  1. Basic salary and dearness allowance: ₹ 50,000 and applicable Rate of interest @ 8.65% p.a.
  2. Contribution towards EPF -Employee’s (12% of ₹ 50,000) = ₹ 6,000; Employer’s (3.67% of ₹ 50,000) = ₹ 1,835;
  3. Employer’s contribution towards EPS (8.33% of ₹ 50,000): ₹ 4,165;
  4. Employer’s contribution towards EPS under the ₹ 15,000 wage ceiling (8.33% of ₹ 15,000) = ₹ 1,249.50
  5. The contribution made by the employer towards EPS that is more than the wage ceiling (₹ 4,165 - ₹1,249.50) = ₹ 2,915.50
  6. The excess contribution made by the employer is added to the EPF contribution (₹ 2,915.50 + ₹ 1,835) = ₹ 4,751.50, which is rounded off to ₹ 4,751

Therefore, the total contribution made by the employer and employee towards EPF (₹ 6,000 + ₹ 4,751) is ₹ 10,751.

Formula method:

The method provided below is to calculate the interest accrued on the contributions made by the employer and the employee using the formula method:

(8.65 % / 12) x ₹ 10,751 = ₹ 77.49, which is rounded off to ₹ 77, is the interest accrued every month and is processed annually.

Step method: 

The process mentioned below provides the break-up of interest rate and the amount that gets collected in the provident fund account every year. Mentioned below is the calculation of interest using the step method:

  1. Effective rate of interest per month comes down to - 8.65%/12 = 0.72%
  2. Using the same on contribution made each month - 0.72% x ₹ 10,751 = ₹ 77.49, which is rounded off to ₹ 77.
  3. Therefore, the process of calculating the accrued interest of the contributions made during the entire year are more or less the same using both the methods.