EPF Full Form: Contribution, Interest Rate, EPS, EDLI and VPF
Independent guide. We are not part of EPFO or the Government, and we never ask for your UAN password, Aadhaar, bank details or OTP.
EPF stands for Employees' Provident Fund. It is the compulsory retirement savings scheme run by EPFO. Every month you put in 12% of your basic wages plus DA, and your employer adds 12%, part of it to your pension. The balance earns interest declared each year: 8.25% for 2025-26.
- Full form
- Employees' Provident Fund
- Run by
- EPFO, Ministry of Labour & Employment
- Law
- Code on Social Security, 2020 and the EPF Scheme, 2026 (from 29 Jun 2026)
- Who must join
- Employees of establishments with 20 or more staff, with PF wages up to ₹25,000 a month
- Your share
- 12% of basic wages + DA
- Employer's share
- 12%: 3.67% to EPF, 8.33% to EPS pension
- Interest, 2025-26
- 8.25% a year, on the monthly running balance
- Helpdesk
- 14470; complaints on EPFiGMS
What is EPF?
EPF is a savings account for your retirement that your employer must open for you if the job is covered. Money goes in from every salary, earns interest, and is yours to take at retirement or in the cases the scheme allows. It sits under your UAN, the 12-digit number that stays with you across jobs.
EPFO runs three schemes together. Your monthly deduction pays for all three:
- EPF: your savings account, which earns interest.
- EPS (Employees' Pension Scheme): a monthly pension later, paid from the employer's 8.33%.
- EDLI (Employees' Deposit Linked Insurance): life cover if you die while in service, paid for by the employer.
The new EPF Scheme, 2026, EPS, 2026 and EDLI Scheme, 2026 replaced the old 1952, 1995 and 1976 schemes, in line with the Code on Social Security, 2020. The EPF Scheme, 2026 came into force on 29 Jun 2026.
Who is covered
- Establishments: every establishment with 20 or more employees. The old limit to listed "scheduled" industries has been removed. Smaller establishments can join voluntarily.
- Wage ceiling: from 17 Sep 2026, membership is compulsory if your PF wages are up to ₹25,000 a month (earlier ₹15,000, unchanged since September 2014). EPFO expects more than 51 lakh more workers to be covered.
- PF wages, not gross pay: the ceiling is checked against wages as defined in the Code (basic + DA + retaining allowance), not your total salary. EPFO's sample: gross ₹50,000 with PF wages of ₹25,000 must be covered; gross ₹60,000 with PF wages of ₹30,000 need not, but may join with the employer's consent.
- No form to fill: enrolling newly eligible employees is the employer's legal duty. Daily-rated and piece-rated workers can be members too.
How your money moves each month
Contributions: employee vs employer
- You pay 12% of your PF wages, deducted from salary. All of it goes to your EPF account.
- Capped at ₹25,000: if your PF wages are higher, the compulsory contribution is normally worked out on ₹25,000 (₹3,000 a month), unless you already contribute on higher wages under the scheme rules.
- Earning ₹15,000–₹25,000? From 17 Sep 2026 you must be in EPF, EPS and EDLI. If you were in EPF but not EPS, you now join EPS as well.
- Take-home pay: your deduction can rise (for example ₹2,400 instead of ₹1,800 on ₹20,000 wages), but your employer's matching share rises too, and both stay your money.
- Check every month: your passbook should show both shares for each month. See how to check your passbook.
The employer pays its share on top of wages; it can never be recovered from the employee, even by calling it part of CTC. Monthly amounts from EPFO's own table (from the October 2026 wage month):
| PF wages | Employee EPF 12% | Employer EPF 3.67% | Employer EPS 8.33% | EDLI 0.5% | Admin 0.5% |
|---|---|---|---|---|---|
| ₹10,000 | ₹1,200 | ₹367 | ₹833 | ₹50 | ₹50 |
| ₹15,000 | ₹1,800 | ₹550 | ₹1,250 | ₹75 | ₹75 |
| ₹20,000 | ₹2,400 | ₹734 | ₹1,666 | ₹100 | ₹100 |
| ₹25,000 (cap) | ₹3,000 | ₹917 | ₹2,083 | ₹125 | ₹125 |
- Pension share capped: the employer's EPS share is at most 8.33% of ₹25,000 = ₹2,083 a month (it was ₹1,250).
- Not in EPS? EPS membership is only for employees whose wages did not exceed the ceiling on joining (or on 17 Sep 2026). For others, the employer's full 12% goes to EPF.
- Government's share: the Central Government adds 1.16% to the pension fund, still limited to wages of ₹15,000 (₹174 a month).
- Deadline: file the monthly return (ECR) and pay within 15 days of the end of the month. Minimum admin charge is ₹500 a month per establishment with at least one contributing member.
EPF interest rate and how it is credited
- 2025-26: 8.25% a year. EPFO's Central Board of Trustees (CBT) recommended it on 2 Mar 2026, and EPFO's September 2026 guidance quotes 8.25% for 2025-26. 2024-25 was also 8.25%.
- Who decides: the CBT recommends a rate each year; the Government of India notifies it; then EPFO credits it to every account. For 2024-25 the credit reached all members by July 2025.
- How it is worked out: compound interest on the monthly running balance, credited once a year.
- When it stops: an account becomes inoperative, and stops earning interest, if no contribution comes in for 3 years after you retire at 55 or later. Leave a job early and the account keeps earning interest until you turn 58. Transfer old balances to your current account through your UAN.
EPS pension and EDLI insurance
| EPS (pension) | EDLI (insurance) | |
|---|---|---|
| Paid by | Employer 8.33% (up to ₹2,083) + Government 1.16% (up to ₹174) | Employer 0.5%; nothing from you |
| Benefit | Monthly pension at 58 with at least 10 years' service; reduced pension from 50. Spouse, children's, orphan and disablement pensions | Lump sum to your nominee if you die in service: ₹2.5 lakh to ₹7 lakh |
| Formula | Pensionable salary (average of last 60 months) × pensionable service ÷ 70 | Based on your average wages and PF balance over the last 12 months |
| Less than 10 years? | Take a withdrawal benefit, or a scheme certificate to carry service forward | — |
The higher wage ceiling raises the wage counted for EPS and EDLI, but the EDLI maximum stays ₹7 lakh under the EDLI Scheme, 2026. Pension, transfer and claim forms are explained on our UAN page.
Withdrawing EPF
- While working: with at least 12 months' service you can withdraw up to 75% of the eligible balance; 25% stays as a minimum balance.
- On leaving or retiring: final settlement of the full balance is allowed in cases such as retirement and permanent disability. The exact conditions under the EPF Scheme, 2026 are shown on the Member Portal when you file. Check them there.
- How to claim: online, with an activated UAN, seeded Aadhaar and bank account. Step by step: filing a PF claim.
- Changing jobs? Don't withdraw by default. Transfer the balance so that interest and service continue.
- Tax: the rules are in the Income-tax Act, 2025. Employer contributions to PF, NPS and superannuation above a combined ₹7.5 lakh a year are taxed as a perquisite. This ceiling has applied since 2020-21 (Finance Act 2020), and EPFO notes that Budget 2026-27 keeps it. For tax on withdrawals and interest, and any TDS, check incometax.gov.in.
VPF: putting in more than 12%
You can ask your employer to deduct more than the compulsory 12% from your salary into your EPF. This is commonly called the Voluntary Provident Fund (VPF). It earns the same EPF interest. Your employer does not have to match the extra: it may keep its own share at the statutory rate. Ask your payroll team to start or change it, since it can only go through your employer.
EPF vs PPF vs NPS
| EPF | PPF | NPS | |
|---|---|---|---|
| Who | Employees of covered establishments (compulsory up to ₹25,000 PF wages) | Any resident individual, at a post office or bank | Indian citizens and OCIs aged 18 to 85 |
| How much | 12% of PF wages + employer 12% | ₹500 to ₹1.5 lakh a year | At least ₹1,000 a year (Tier I); no maximum |
| Return | Rate declared yearly: 8.25% for 2025-26 | Set every quarter: 7.1% for Oct–Dec 2026 | Market-linked; not fixed |
| Pension | Yes, through EPS (10 years' service) | No | Yes, part of the corpus buys an annuity |
| Early access | Up to 75% after 12 months' service | Loan years 3–6; withdrawals from year 7 | Limited partial withdrawals |
| Term | Your working life | 15 years, extendable by 5 | To 60 (or 15 years) |
| Tax | Check incometax.gov.in for the Income-tax Act, 2025 treatment | ||
They are not alternatives for most employees: EPF is compulsory if you are covered, and PPF or NPS can be added on top.
Employer deducted PF but didn't deposit it
Deducting your share and not depositing it is an offence. EPFO can take penal action to recover the dues, and an employer who deposits late pays damages of 1% of the arrears a month on top of interest.
- Check your passbook. Each month should show your share and the employer's share. Employers must pay within 15 days of the end of each month.
- Ask your employer's payroll team in writing for the missing months.
- No result? File a complaint on EPFiGMS (epfigms.gov.in) with your UAN (or the establishment code), the months missing and salary slips showing the deduction. It goes to the PF office that covers your employer.
- For help, call the EPFO helpdesk on 14470 or visit your PF office.
Employer not enrolling you even though your PF wages are ₹25,000 or less? That is also a complaint for EPFiGMS.
Safety
EPFO never asks for your Aadhaar, PAN, bank details or OTP on a call, and never asks you to pay to release your PF. Its online services are free; don't pay agents or cybercafes.
- Use only epfindia.gov.in, the Member Portal and the UMANG app.
- Keep your UAN password private and your nominee updated.
- Lost money to a fraud? Call 1930 or report on cybercrime.gov.in at once.
History of EPF
Employees' Provident Funds and Miscellaneous Provisions Act and the EPF Scheme, 1952.
EDLI Scheme introduced.
Employees' Pension Scheme, 1995 (EPS) introduced.
Wage ceiling raised to ₹15,000.
CBT recommends 8.25% for 2025-26 and approves the new EPF, EPS and EDLI Schemes.
EPF Scheme, 2026 in force (G.S.R. 525(E)).
Wage ceiling raised to ₹25,000 (S.O. 5109(E)).
FAQs
What is the full form of EPF?
Employees' Provident Fund: the compulsory retirement savings scheme run by EPFO for employees of covered establishments.
What is the EPF interest rate for 2025-26?
8.25% a year, recommended by the CBT on 2 Mar 2026 and quoted by EPFO as the 2025-26 rate. It is the same as 2024-25.
What is the EPF wage ceiling now?
₹25,000 a month from 17 Sep 2026, up from ₹15,000. It is measured on PF wages (basic + DA + retaining allowance), not gross salary.
How much of my salary goes to EPF?
12% of your PF wages, capped at ₹25,000 for compulsory contribution. Your employer adds 12% more: 3.67% to EPF and 8.33% to EPS.
Can my employer take its share from my salary?
No. The employer's contribution is separate and can't be deducted from you, even if your offer letter shows it inside CTC.
Can I contribute more than 12%?
Yes, as a voluntary contribution (VPF) through your employer. It earns EPF interest, but the employer need not match it.
How much can I withdraw while still working?
Up to 75% of the eligible balance after at least 12 months' service; 25% stays as a minimum balance. File the claim online with your UAN.
Is EPF better than PPF?
They do different jobs. EPF is compulsory for covered employees and includes an employer share, pension and insurance; PPF is a voluntary account anyone resident can open. Many people use both.
Official sources
- EPFO – FAQs on revision of wage ceiling to ₹25,000 (S.O. 5109(E), 17 Sep 2026): contribution tables, EPS, EDLI, withdrawals, 2025-26 rate (accessed 31 Oct 2026)
- PIB – Cabinet approves higher EPFO wage ceiling of ₹25,000, Sep 2026 (accessed 31 Oct 2026)
- PIB – Cabinet raises EPF wage ceiling to ₹25,000 (12%, 3.67%, 8.33%, 1.16% split), 17 Sep 2026 (accessed 31 Oct 2026)
- PIB – EPFO raises wage ceiling; maximum EPS contribution ₹2,083, Sep 2026 (accessed 31 Oct 2026)
- PIB – 239th CBT meeting: 8.25% for 2025-26; new EPF, EPS and EDLI Schemes, 2 Mar 2026 (accessed 31 Oct 2026)
- PIB – EPF Scheme, 2026 notified (G.S.R. 525(E), 29 Jun 2026) (accessed 31 Oct 2026)
- PIB – Ministry of Labour & Employment Year End Review 2025 (2024-25 interest credited by July 2025) (accessed 31 Oct 2026)
- PIB – EPFO welcomes rationalisation of income-tax regime for provident funds, 3 Feb 2026 (accessed 31 Oct 2026)
- Ministry of Labour & Employment – Compliance Handbook for Employers under the Four Labour Codes (20+ employees) (accessed 31 Oct 2026)
- EPFO – EPF Scheme page and FAQs (VPF, non-deposit by employer) (accessed 31 Oct 2026)
- EPFO – Employees' Pension Scheme page (accessed 31 Oct 2026)
- EPFO – EDLI Scheme page (accessed 31 Oct 2026)
- EPFO – FAQs (interest on monthly running balance, inoperative accounts, voluntary contribution, EPFiGMS) (accessed 31 Oct 2026)
- EPFO – EPFiGMS grievance portal (accessed 31 Oct 2026)
- Ministry of Home Affairs – National Cybercrime Reporting Portal (accessed 31 Oct 2026)
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