How EPF contributions work
| Item | Rate / figure | Notes |
|---|---|---|
| Employee contribution | 12% of basic + DA | Deducted from your salary. You can add more as VPF (Voluntary PF). |
| Employer contribution | 12% of basic + DA | Split: 8.33% to EPS (pension) on wages up to the ceiling, the rest (3.67% or more) to your EPF account. |
| Wage ceiling | ₹25,000 a month from 17 Sep 2026 | Was ₹15,000. Mandatory coverage and the EPS share are now worked out on up to ₹25,000. |
| Maximum EPS share | ₹2,083 a month | 8.33% of ₹25,000 (was ₹1,250 on ₹15,000). |
| Interest rate FY 2025-26 | 8.25% | Fixed by the CBT on 2 March 2026; Finance Ministry concurrence June 2026. Same as 2023-24 and 2024-25. |
| Tax on interest | Taxable above ₹2.5 lakh | Interest on your own contributions above ₹2,50,000 a year (₹5,00,000 if no employer contribution) is taxable. |
Worked example (default inputs)
Basic ₹30,000 a month, age 30, ₹2 lakh already saved, 5% rises: each month you put in ₹3,600 and your employer ₹3,600, of which ₹2,083 goes to EPS and the rest to EPF — so ₹5,117 reaches your EPF account each month. At 8.25% the balance at 58 comes to about ₹1,38,39,456.
What changed on 17 September 2026
The Union Cabinet raised the EPFO wage ceiling from ₹15,000 to ₹25,000 a month on 16 September 2026, effective the next day. About 51 lakh more workers earning ₹15,001–₹25,000 are now covered compulsorily. If you already earn more and your employer contributes only on the ceiling, your employer’s minimum rises from ₹1,800 to ₹3,000 a month. EPFO’s detailed circulars on the change are still being rolled out, so treat the EPS split as an estimate.
How interest is calculated
EPFO credits interest once a year, at the end of March, but works it out month by month on the running balance. This calculator does the same and assumes the rate stays at 8.25% — the CBT declares a new rate every year, so the real figure will move a little.
FAQ
What is the EPF interest rate for 2025-26?
8.25% a year, the same as for 2023-24 and 2024-25. It was fixed by EPFO’s Central Board of Trustees on 2 March 2026 and approved by the Finance Ministry in June 2026.
How much goes to EPS and how much to EPF?
Of the employer’s 12%, 8.33% of wages up to ₹25,000 goes to EPS — at most ₹2,083 a month — and the rest goes to your EPF account. Your own 12% all goes to EPF.
How much will I have at 58 with ₹30,000 basic?
Starting at 30 with ₹2 lakh saved, 5% yearly rises and 8.25% interest, about ₹1,38,39,456.
Is EPF withdrawal at 58 taxable?
No, if you have 5 years of continuous service. Interest on employee contributions above ₹2.5 lakh a year is taxed every year as it is credited.
Sources (checked 5 November 2026): PIB, “Cabinet Approves Higher EPFO Wage Ceiling of Rs. 25,000” (16 September 2026, effective 17 September 2026) and PIB release of 17 September 2026 (12% / 8.33% / 3.67% split); EPFO / Ministry of Labour — 8.25% interest for 2025-26 (CBT meeting 2 March 2026, ratified June 2026; reported by ThePrint and Tribune); Employees’ Provident Funds Scheme 1952 and Employees’ Pension Scheme 1995; Income-tax Act provisions on taxable PF interest above ₹2.5 lakh.