EPF interest for FY25 fixed at 8.25%: Check how much will be credited to your account & when

The central government has confirmed an interest rate of 8.25% on Employees' Provident Fund (EPF) deposits for the fiscal year 2024-25. This rate matches the previous year's figure, which was set against a substantial income of Rs 1.07 lakh crore on a principal corpus of Rs 13 lakh crore. The decision was initially recommended by the Central Board of Trustees (CBT) in February and subsequently approved by the Ministry of Finance.

The Employees' Provident Fund Organisation (EPFO) has been consistent with interest rates over the past few years. In 2022-23, the rate was slightly lower at 8.15%, supported by an income of Rs 91,151.66 crore on a principal of Rs 11.02 lakh crore. These numbers highlight a trend of steady income growth despite changes in economic conditions over recent years.

EPF interest

The EPF interest is computed on a monthly basis and is then included in the balance for the subsequent month. The interest rate is evaluated annually, with the current rate being set at 8.25% for the financial year 2024. To calculate the monthly interest, you may utilize the formula: (Closing balance at the end of the month * Current EPF interest rate) / 12.

To determine the monthly closing balance, which is the total amount in your EPF account at the conclusion of each month, and to obtain the current EPF interest rate, which is presently fixed at 8.25% for FY 2024-25 according to ClearTax, follow the steps outlined above.

Additionally, to calculate the monthly interest, divide the annual interest rate by 12 to obtain the monthly interest rate (8.25% / 12 = 0.6875%). Then, multiply the monthly closing balance by the monthly interest rate: (Closing Balance * 0.6875%).

The resulting figure will represent the interest earned for that specific month, which will subsequently be credited to your EPF balance for the following month.

Interest calculation on PF

Interest accumulation on EPF accounts is calculated based on the monthly running balance and credited at the end of the financial year, as established by Para 60 of the EPF scheme 1952. For EPF account holders, understanding the contributions from both employees and employers is crucial to estimate the total interest accrued by year-end.

Employees contribute 12% of their basic salary to the EPF, matched by employers. However, a portion of the employer's contribution is allocated to the Employees' Pension Scheme (EPS). For example, if an employee's monthly basic salary is Rs 50,000, both the employee and employer contribute Rs 6,000 each month, with Rs 4,750 going into the EPF and Rs 1,250 into the EPS.

The EPF interest is typically credited later in the financial year, prompting account holders to regularly check the credited interest status. The EPFO provides alternative methods, such as missed call and SMS services for balance checks, ensuring users can access their balance and last contributions easily.

Checking EPF balance

To check the EPF balance using a missed call, employees must dial 9966044425 from their registered mobile numbers, receiving an SMS detailing their balance and last contribution. Alternatively, sending 'EPFOHO UAN' to 7738299899 via SMS will also provide the necessary balance and contribution details. These services require the Universal Account Number (UAN) to be activated and linked to the employee's mobile number, with updated KYC details.

These balance checking services are accessible at no cost to employees, facilitating an efficient process to keep track of EPF contributions and interest, aiding financial planning. Supported languages include English, Hindi, Punjabi, Gujarati, Marathi, Kannada, Telugu, Tamil, Malayalam, and Bengali, adding to the accessibility for a diverse workforce.