How to calculate interest paid on PF amount? - CiteHR
S.Chandrasekar
Hr-manager, Trainer, Writer
Prawesh Deep
Hr Executive
Abbasiti
Assistant Engineer, Indian Telephone Industries,
Network
Consultant
Anupatiyal
Payrolling, Er

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Dear Friends, I do have a query related to interest on PF. You must be aware of that 8.5% compound interest is paid on PF Amount annually now my query is that how do we calculate the interest if anybody is having the format of same would be really thankful if could attach that for me.
Hoping a helping nature!
Thanks
Anu

It is 8.5% compounded annually. I came across a PF calculator and uploading it here. Please check it at your end. It does not show the bifurcation of EPF,EPS contribution. It is showing only the total Ee + Er contribution and interest on it.
Regards,
Chandru

Attached Files
 Membership is required for download. Create An Account First PF interest calculator.xls (22.0 KB, 11163 views)

Check with the zonal office in AP. The coverage areas are displayed on epfindia.in website. You can find out the PF status of the employer also. If not displayed, please walkin to the PF office and get it clarified.
Regards,
Chandru

Provident Fund

For all employees who work in an organized sector, following is the PF
contribution every month.

PF contribution by Employee = 12% of basic salary.

PF contribution by Employer = 12% of basic salary.

Employer Pension Scheme

Out of 12% contribution from employer, 8.33% of the contribution (subject to
maximum of 541 rs/month) is invested in employer pension scheme.

Lets take an example and understand this.

Ram's basic salary per month = 15,000

Ram's contribution to PF = 12% of 15,000 = 1,800

Ram's Employer contribution = 12% of 15,000 = 1,800

Employer's contribution to EPS = 8.33% of 15,000 = 1250

This 1250 is higher than the max limit of Rs 541/month and hence

Employer's contribution to EPS = 541

Employer contribution to PF = 1800-541 = 1259

So Total PF contribution to Ram's PF account per month = 1800 + 1259
= 3059

How to calculate your PF balance?

Interest Rate on PF account = 8.5% (fixed by central govt)
So monthly contribution of 3059 for one year @ 8.5%

Hope its clear now

Surender Singh

Let me put it in easy steps.
Employee total contribution is 12% of Basic
The Employer contribution is divided in two EPS 8.33% / EPF 3.67% parts. If Basic is less than >6500, the actuals are taken for EPS and EPF at stipulated rate. For Basic <6500, EPS ceiling is fixed at 541 and the remaining goes to EPF. Blindly the calculation cannot be done.
Just apply the banking compound interest to the (EePF + ErPF) accumulation and don't mix Pension Fund Scheme in to this.
Hope I have clarified the exact doubt of yours.
Regards,
Chandru

Dear
THanks a lot for the way u have tried is really wonderful but my query is not "how to calculate PF amount" but "how to calculate interest on amount", sorry 2 say but u have just mentioned "monthly contribution of 3059 for one year @ 8.5%" but did not explain (like 8.5% of 3059) which is not correct.
my quey is yet 2 get solved dear friends kindly help me!!!!
Thanks & Regards
Anu

See, a ready reckoner working is not available with me right now. If you are good in Excel, you can do the following.
Ee PF Cont(12%), Er PF cont(3.67%), Int @8.5% for 30 days, (PF+Int) amount
Like this add up the previous (PF+Int) amount with current month (Ee+Er) and work out for 30 days. ....upto 12 months.
If you do a flat calculation on 24% of PF, your answer is wrong because only the (EE/Er) PF part is taken into consideration in the Annual PF slip. EPS interest is not shown here.
Regards,
Chandru

Regarding PF interest calculation, it is monthly compounding and round to nearest rupee. However I shall insert an Excel Sheet in this regard. You extend the rows (as per your requirement) and enter the the salary applicable for PF.
ABBAS.P.S, ITI LTD, PALAKKAD -678 623
Ph. +91 9447 467 667

Attached Files
 Membership is required for download. Create An Account First EPF Statement.xls (15.5 KB, 917 views)

Hello Dear,
Intrest is calculated compoundly which is calculated every month at +(8.5/12/100)+1=.007+1=1.007 per month
for example your basic + da wages is 3500/- per month'
then epf amount will be-420+3500*3.67/100=420+128=548
then intrest calculation will be- 548*1.007/100=5.52 which will be added to next month epf amount n intrest will be calculated for nex month.
i hope you will be satishfied with my answer.
Regards
Prawesh

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