onlyraja Started The Discussion:
I would like to understand how the interest rate for Provident Fund is being calculated.

For better understanding, let me share my PF slip for 2003 - 2004 on which the below details were printed:
* The opening balance is '0' as i joined the company fresh.
* The yearly contribution was Rs 7760.
* The yearly interest rate was 9.5% and the interest earned was Rs 216.


As per the usual calculation, the interest earned should be some where near Rs 700. But i am wondering how just Rs 216 has been calculated.
It'll be really great, if some one help me to understand the logic behind this.

Thx
Rajaram
Posted 6th March 2009 From India, Madras
hi Rajaram,

First thing is that, Interest on PF is not 9.5 %. It is 8.5%.

now lets come to your query, first you understand that, employees contribution (means 12%) directly goes in Provident fund a/c. but,

Employer's contribution (13.61%) is divided in to 5 part as mentioned below..

1) 8.33% goes in Pension Fund
2) 3.67% goes in Provident Fund
3) 0.50 % goes in EDLI (Employees Deposit Link Insurance)

rest 1.61 % divided in Admin Charges
1) 1.10% Admin charges on PF A/c
2) 0.01% Admin charges on EDLI a/c

If you see you annual PF slip carefully, So, you will found that, Provident Fund amount details only mentioned in annual slip, it means not mentioned the Pension amount details.

Interest rate of PF is calculate on employees contribution as well as Employer Contribution. So, you are getting the interest on both contribution.

That the reason, it is wonderfull to you, its showing more than you expection. for your information, your some more money (Other than mentioned in annual PF slip) is safe in Pension Fund.

In further you can withdra you PF as well as Pension amount also. but EDLI amount is not be reimbursment, It can be use only, IF you not register in ESIC, & if you meet any accident in further (Sorry to say that), you will be get the benefit of same. EDLI is like a Insurance.

If you want to know any thing else, Please let me know...

Regards,




Posted 7th March 2009 From India, Mumbai
Here is a simple calculator to know your EPF kitty worth for any given year....:)
Posted 10th March 2009
Attached Files
Shared By Cite.Community Member "devaprasad" For Public Download
File Type: xls EPF Calculate your kitty for the FY.xls (23.5 KB, 20997 views)
Dear Rajaram,

I think the EPF Dept has calculated your Interest in the right way. I can show you the calculation statement if you provide the following information

1) Your date of Joining
2) Your monthly salary (Basic + DA ) during the slip period
3) Your monthly EPF deduction ( Normally it must be 12 % of your Basic + Da)

Thanks

Jishnu.V.Nair
Tax & EPF Consultant
Kerala
infomanimangalam@gmail.com
Posted 18th March 2009 From India, Thiruvananthapuram
Dear Jishnu,

Please provide formula for calculation of Interest on Provident Fund on my contact no-9773447965

My contribution to pf was Rs.4326 & employer contr was Rs.1323 I got Int of Rs.130 & 40 respectively for 2006-2007 dt of joining-27.04.06

My basic was
MonthBasic12%3.67%Apr-063464213May-063000360110Jun-063000360110Jul-063000360110Aug-063000360110Sep-063950474145Oct-063950474145Nov-063950474145Dec-063950474145Jan-073950474145Feb-073950474145 36,046 4,326.00 1,323.00

I will be great help

Regards,
Vinayak
Posted 19th March 2009 From India, Mumbai
Could anyone plaese tell me the eaxct procedure to calculate interest during the year with the contribution
Posted 28th January 2010 From India, Calcutta
Thanks Mr. Devaprasad ! Your spreadsheet gave me results matching exactly with my PF statements. The calculation is crystal clear now. Regards, Gaurav
Posted 1st February 2010 From United States, Buffalo
Thank you Devaprasad. Very easy to follow your sheet. Thanks. It’s crystal clear to understand the logic and easy to use.
Posted 11th February 2010 From India
Good afternon sir,


This is kiran and i want to know that how can we calculate the total amount of pf of an employee if he attain the age of 58 and want to leave the job from the employment? could you give me an answer with an example?
Posted 2nd March 2010 From India, Mumbai
Hi Rajaram

THe interest for EPF is computed on a reducing balance method

The attached file will compute the same for you

You may use this for your reference

You can change the year or copy paste the entire sheet to another and rename the year

pls mail me at for any clarification

Regards
Jeeva Rajagopal
Posted 29th April 2010
Attached Files
Shared By Cite.Community Member "jrhrmba" For Public Download
File Type: xls EPF INT CALCULATION.xls (25.0 KB, 7245 views)
567567 
Thanks tushar !!! Thanks for elaboratng the basic structure of the contribution of Employer PF Thanks a lot
Posted 6th September 2010 From India, Delhi
Dear Jeeva Rajgopala Please provide how to fill the data in this sheet. it will be usefull for all of us. thanks Janmejay Kumar
Posted 6th September 2010 From India, Delhi
In EPF interest is monthly compounded and round to nearest rupee seperately for both employee and employer contribution. I shall insert an excel sheet w.e.f 16.11.95.

The interest rates are

16.11.95 to 31.3.2000 - 12%
1.4.2000 to 31.3.2001 - 11%
1.4.2001 to 31.3.2005 - 9.5%
1.4.2005 to 31.3.2010 - 8.5%
1.4.2010 onwards - 9.5%

Salary Ceiling limits

16.11.95 to 31.5.2001 - 5000
1.6.2001 onwards - 6500

Extend the rows as per requirement and enter applicable salary, interest rate & ceiling limit.

Abbas.P.S
Posted 23rd September 2010 From India, Bangalore
Attached Files
Shared By Cite.Community Member "abbasiti" For Public Download
File Type: xls EPF Statement.xls (19.5 KB, 952 views)
Hello, Become expert in payroll NATIONAL ACADEMY OF INDIAN PAYROLL Regards Joseph - josephpatrao@gmail.com Half-Knowledge is Dangerous
Posted 25th October 2010 From India, Mumbai
Please let me know the process of calculation of interest on PF. Is it calculated like interest on RD or interest is calculated in the last of the financial year on total sum depoisetd in PF a/c.
Posted 4th November 2010 From India, Ranchi
Dear Vishal, I have already posted that PF interest is monthly compounding. . . . . . . . Abbas.P.S
Posted 4th November 2010 From India, Bangalore
Hi,

I have been struggling to transfer my PF since Oct 2000.

Could you please provide me the EPF interest rate from 2000 to 2012? I am creating my own calculation sheet would like to check my balance?

Please help.

Regards
Hari

C V Haribabu
Posted 15th January 2013 From India, Bangalore
Thanks Jeeva ! This excel sheet is quite good and self explanatory. One just need to update his data.
Posted 27th January 2013 From India, Delhi
Dear Professionals,

Deviprasad's sheet has helped me to understand how the PF Interest part will be calculated. But Interest part will be calculated in a pro - rata basis? for an example if an employee joins on 13th of Feb, will the Interst part calculate in a pro - rata basis? Pls confirm.

Regards,
Kamesh.
Posted 22nd February 2013 From India, Kakinada
how can i get my Pension Fund? i got the PF amount credited in my account.
Posted 24th October 2013 From United Kingdom, London
Thank you Devaprasad. Very easy to follow your sheet. Thanks. It’s crystal clear to understand the logic and easy to use.[
Posted 2nd December 2014 From India, Hyderabad
good evenig sir please divide my gross salary of rupees 9000 basic salary=? HRA=? Medical reimbursement=? Conveyance Allowance=? Special allowance=? Provident Fund=? ESI=? Gratuity=?
Posted 24th February 2015 From India, Hyderabad



 
 
 
 







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