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.
6th March 2009 From India, Madras

Member Opinions In This Discussion
India, Mumbai
Manager - Human Resource
India, Thiruvananthapuram
Income Tax, Sales Tax, Insurarnce, Epf &
India, Bangalore
Assistant Engineer, Indian Telephone Industries,
Training & Development, Hr Generalist
India, Hyderabad
Process Associate
India, New Delhi
Junior Engineer
+7 Others

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...


7th March 2009 From India, Mumbai
Here is a simple calculator to know your EPF kitty worth for any given year....:)
10th March 2009
Attached Files
File Type: xls EPF Calculate your kitty for the FY.xls (23.5 KB, 21578 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)
Tax & EPF Consultant
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
19th March 2009 From India, Mumbai
Thanks Mr. Devaprasad ! Your spreadsheet gave me results matching exactly with my PF statements. The calculation is crystal clear now. Regards, Gaurav
1st February 2010 From United States, Buffalo
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?
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
Jeeva Rajagopal
29th April 2010
Attached Files
File Type: xls EPF INT CALCULATION.xls (25.0 KB, 7542 views)
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.
23rd September 2010 From India, Bangalore
Attached Files
File Type: xls EPF Statement.xls (19.5 KB, 1114 views)
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.
4th November 2010 From India, Ranchi
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