The Employee Provident Fund Organization (EPFO) has announced a 0.05% interest rate increase on the EPF for the financial year 2022-23.
The new interest rate has increased to 8.15%, up from 8.10% the previous year. The EPFO announced the new interest rate in its circular on July 24, 2023.
The circular mentions, “The Ministry of Labor and Employment, Government of India, has conveyed the approval of the Central Government under paragraph 60(1) of the Employee Provident Fund Scheme 1952 to credit interest @8, 15% for 2022-23 to the account of each member of the EPF Program as defined in Section 60 of the EPF Program, 1952.”
EPF is a retirement savings scheme in India administered by EPFO. This is a contribution pension scheme in which both the employer and the employee contribute a certain percentage of the employee’s salary.
EPF interest rates are adjusted annually on the basis of EPFO’s investment performance.
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How to calculate new EPF interest?
Interest on EPF is calculated monthly but will be credited to the account at the end of the financial year. The calculation of interest is as follows:
Interest rate = (EPF account balance * interest rate) / 12
For example, suppose the employee’s base salary and invaluable allowance are ₹30,000. Employee contribution to EPF is 12% of salary, or ₹3,600.
The employer’s contribution to the EPF is also 12% of salary, but the maximum payable is ₹1,250. In this case, the employer’s contribution to the EPF is ₹2,350.
The total monthly EPF contribution is ₹3,600 + ₹2,350 = ₹5,950.
The interest rate for the EPF for the fiscal year 2022-2023 is 8.15%.
For example:
Assume the employee joins the service on April 1, 2022. The total EPF contribution for April is ₹5,950. The interest rate for April is calculated as follows:
Profit = (5,950 * 8.15%) / 12 = 70.83
Since employees join the service in April, there is no interest in April. The EPF account balance at the end of April was ₹5,950.
The total EPF contribution for May is ₹5,950. Total EPF account balance as of May is ₹11,900. EPF contribution interest rate for May is calculated as follows:
Profit = (11,900 * 8.15%) / 12 = 84.29
Interest for May will be credited to the EPF account at the end of the financial year.
How to check your EPF balance?
To check your EPF balance online, you can follow these steps:
- Visit the EPFO website: https://www.epfindia.gov.in/
- Click on Service
- Click the “Member Passbook” tab.
- Enter your UAN (Universal Account Number) and password.
- Click the Sign In button.
Here are the steps to view your EPF Balance on Umang App:
- Download and install the UMANG app on your phone.
- Open the UMANG app and register with your mobile number.
- Tap the “Employee Provident Fund” (EPFO) option.
- Click the “View Passbook” button.
- Enter your UAN and click “Get OTP”.
- Enter the OTP received on your registered mobile number and click “Login”.
- Your passbook and EPF balance will be displayed on the screen.
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Source: pagasa.edu.vn