Quick answer: EPF (Employees' Provident Fund) is the compulsory retirement savings scheme run by EPFO. In establishments with 20 or more employees, employer and employee each contribute 12% of PF wages. The employer's 12% is split: 8.33% to the pension scheme (EPS) on wages up to ₹25,000 and the rest to the employee's EPF account, plus 0.5% for EDLI insurance and 0.5% administration charges. Since 29 June 2026 these run under the EPF, EPS and EDLI Schemes, 2026, and the wage ceiling is ₹25,000 from 17 September 2026.
Provident fund is the largest statutory deduction on most Indian payslips and the one that raises the most questions, from "why is my PF only ₹1,800?" to "when can I withdraw it?". This guide is the starting point for everything PF on HR Calcy: what EPF is, who must pay it, the contribution split, employer duties, what employees can withdraw, interest, tax, and how the 2026 schemes changed things. It sits within our wider guide to payroll in India.
What is EPF?
The Employees' Provident Fund is a social security scheme for employees of covered establishments, run by the Employees' Provident Fund Organisation (EPFO). It is now governed by the Code on Social Security, 2020 and three schemes notified on 29 June 2026, which replaced the 1952, 1995 and 1976 schemes:
- EPF Scheme, 2026: the savings account, built from employee and employer contributions plus interest.
- Employees' Pension Scheme (EPS), 2026: a monthly pension after 10 years of service, funded by 8.33% of the employer's contribution.
- EDLI Scheme, 2026: life insurance for members, paid by the employer at 0.5% of wages. Cover ranges from ₹2.5 lakh to ₹7 lakh for members in continuous employment for 12 months (PIB); our EDLI calculator shows the benefit.
Each member has one Universal Account Number (UAN) for life, which links every PF account they hold with different employers. Existing members moved to the 2026 schemes automatically; our post on the Social Security Code transition explains what changed and when.
Who must pay PF
Establishments: PF applies to establishments employing 20 or more people. Smaller establishments can join voluntarily.
Employees: in a covered establishment, PF is compulsory for every employee whose PF wages are up to ₹25,000 a month. An employee who joins with PF wages above ₹25,000 and who was never a PF member before is an excluded employee and need not be enrolled, though they may join voluntarily with the employer's agreement. Anyone who is already a member stays a member when their pay rises above the ceiling.
PF contribution rates
The rates below were notified with the 2026 schemes, and the ₹25,000 wage ceiling applies from 17 September 2026:
| Contribution | Rate | At PF wages of ₹25,000 |
|---|---|---|
| Employee PF (deducted from salary) | 12% of PF wages | ₹3,000 |
| Employer to EPS (pension) | 8.33% of wages up to ₹25,000 | ₹2,083 |
| Employer to EPF (balance of 12%) | 12% minus the EPS share | ₹917 |
| Employer EDLI (insurance) | 0.5% of wages up to ₹25,000 | ₹125 |
| Employer administration charges | 0.5% of PF wages (minimum ₹500 a month per establishment) | ₹125 |
So at PF wages of ₹25,000, ₹6,000 a month goes towards the member (₹3,000 + ₹3,000), of which ₹3,917 goes into the EPF account and ₹2,083 into the pension fund. The employer's total cost is ₹3,250 including EDLI and administration charges.
Is EPF 12% or 13%? Both figures are used. The employee pays 12%. The employer pays 12% as contributions plus 0.5% for EDLI and 0.5% administration charges, so its total cost is about 13% of PF wages (subject to the ₹25,000 ceiling for EPS and EDLI and the ₹500 minimum on administration charges).
Where PF wages are above ₹25,000, the employer can either restrict contributions to the ceiling (₹3,000 each) or contribute on actual wages. The EPS share stays capped at ₹2,083 either way, so any extra employer contribution goes into the EPF account. Employees can also add voluntary PF (VPF) above 12%, which the employer is not required to match; see the VPF calculator.
Why is my PF only ₹1,800, or ₹3,000?
PF is always 12% of PF wages; ₹1,800 and ₹3,000 are simply 12% of the old and new ceilings. ₹1,800 was 12% of the old ₹15,000 ceiling, the most PF an employer had to deduct when it restricted PF to the ceiling, until September 2026. From 17 September 2026 the ceiling is ₹25,000, so the restricted figure is now ₹3,000 a month for anyone whose PF wages are ₹25,000 or more. If your deduction is still ₹1,800 for a full month after September 2026, ask payroll. Our PF wage ceiling guide explains the change and the split September.
What counts as PF wages
PF is worked out on wages as defined in the Labour Codes, not on gross salary and no longer just on basic. Wages include basic pay, DA, retaining allowance and any allowance not on the exclusion list, such as a fixed special allowance; HRA, conveyance, overtime, bonus and commission are excluded, but if excluded items exceed half of total remuneration, the excess is added back. Our guides to basic salary and the 50% wage rule explain this, and the PF deduction guide has a deduction table for common salaries.
Employer duties under PF
- Register the establishment with EPFO once it reaches 20 employees, and keep the registration details current.
- Enrol every eligible employee on joining: generate or link their UAN and record Aadhaar, PAN and bank details.
- Deduct employee PF each month from wages, at 12% of PF wages (or of the ceiling, if your policy restricts it).
- File the electronic challan-cum-return (ECR) and pay contributions, EDLI and administration charges within 15 days of the month end.
- Mark exits with the date of leaving, so the member can transfer or withdraw.
- Keep records of wages and contributions, and show PF on every wage slip.
Late payment: interest and damages (sections 7Q and 14B). If PF is paid late, the employer owes two separate amounts. Interest under section 7Q of the old EPF Act is 12% a year, simple. Damages under section 14B (now section 128 of the Code on Social Security) are a penalty; since 14 June 2024 they have been a uniform 1% of the arrears for each month of delay, replacing the older slab of 5% to 25% a year. Both are now calculated through the ECR system. For old damages cases, EPFO's one-time VISHWAS, 2026 scheme lets employers settle at reduced rates; it runs for six months from 29 June 2026, until 28 December 2026, and the Labour Ministry has said the date will not be extended (PIB release). Applications are made through the EPFO employer portal.
For employees: balance, interest and withdrawals
Checking your PF
Your UAN gives you access to the EPFO member portal and passbook, where each month's employee and employer contributions and the annual interest appear. To check your PF end date (date of exit), open the service history in the member portal or UMANG app: it shows the joining and exit date for each employer. If the exit date is missing, ask your previous employer to mark it, because final settlement and some transfers need it.
Interest rate
EPF interest for 2025-26 is 8.25% a year, the same as the previous two years, recommended by EPFO's Central Board of Trustees on 2 March 2026 (PIB release) and ratified by the government in June 2026. Interest is calculated monthly on the running balance and credited once a year. For example, on a balance of ₹2,00,000 that stays unchanged, a year's interest at 8.25% is ₹16,500; with monthly contributions, interest is worked out on each month's closing balance at 8.25% ÷ 12 and added up for the year. Project your balance with the EPF calculator.
Does PF earn interest after leaving a job or retiring?
Yes, for a while. If you stop working before 55, the account keeps earning interest until you turn 58. If you retire at 55 or later, it keeps earning for three years after retirement, after which it becomes inoperative and stops earning interest. The money remains yours and can still be claimed.
Withdrawals under the EPF Scheme, 2026
- Partial withdrawals: available after 12 months of membership for needs grouped into broad categories (such as medical, education, marriage and housing). You must keep at least 25% of your balance in the account; the rest is the "eligible" balance you can draw from.
- Final settlement after leaving a job: full withdrawal is allowed after 12 months without employment (earlier two months), or on retirement.
- Pension (EPS): after 10 years of service, the EPS part becomes a monthly pension from 58; with shorter service it can be withdrawn. See the EPF pension calculator.
When you change jobs, your new employer links your existing UAN, and the old balance can be transferred to the new account. Be wary of viral claims about new withdrawal methods; our EPFO 3.0 UPI and ATM fact check separates what is announced from what is live.
UAN, KYC, nomination and PF services
Most PF services are now online through EPFO's new portal and the member portal. In outline:
- Activate your UAN: since 1 August 2025, UAN activation uses Aadhaar face authentication in the UMANG app instead of the older OTP route. Your UAN is on your salary slip, or your employer can give it to you.
- Complete KYC: link Aadhaar, PAN and bank account to the UAN. Withdrawals and transfers are much faster when KYC is complete.
- File your e-nomination: the EPFO portal says filing a nomination is mandatory under the EPF Scheme, 2026. It covers PF, pension and EDLI, and is e-signed with an Aadhaar OTP.
- Check your balance: in the passbook on the member portal or UMANG app, by a missed call to 9966044425, or by sending "EPFOHO UAN" by SMS to 7738299899 from your registered mobile.
- Transfer on job change: request the transfer of your old PF account online; the old office issues a transfer certificate (Annexure K) to the new one.
- Raise a grievance: through EPFO's online grievance system (EPFiGMS) if a claim or transfer is stuck.
EPF vs ESI vs gratuity vs professional tax
| EPF | ESI | Gratuity | Professional tax | |
|---|---|---|---|---|
| Purpose | Retirement savings, pension, insurance | Medical care and cash benefits | Lump sum on leaving | State tax on employment |
| Employee pays | 12% of PF wages | 0.75% of wages | Nothing | State slab |
| Employer pays | 12% + EDLI + admin | 3.25% of wages | 15 days' wages per year of service | Nothing (deducts and deposits) |
| Who is covered | PF wages up to ₹25,000 (mandatory) | Wages up to ₹21,000 | 5 years' service (1 year fixed-term) | As per state |
Check each with the ESI calculator, the gratuity calculator and the professional tax calculator.
Salary journal entry with PF
For an employee with gross salary of ₹30,000, PF wages restricted to ₹25,000, ₹200 professional tax and no TDS or ESI, the month's entries are:
| Entry | Debit (₹) | Credit (₹) |
|---|---|---|
| Salary expense | 30,000 | |
| To employee PF payable | 3,000 | |
| To professional tax payable | 200 | |
| To salary payable (net pay) | 26,800 | |
| Employer PF expense (₹3,000 + EDLI ₹125 + admin ₹125) | 3,250 | |
| To employer PF payable | 3,250 |
When the ECR is paid, debit employee and employer PF payable (₹6,250) and credit bank. The administration charge is shown at 0.5% for one employee; the ₹500 monthly minimum applies to the establishment as a whole.
PF and income tax
- Employee contribution: deductible under the old regime within the overall limit formerly known as section 80C; no deduction under the new regime.
- Employer contribution: not taxed in your hands, up to a combined limit of ₹7.5 lakh a year for employer PF, NPS and superannuation contributions.
- Interest: tax-free, except interest on your own contributions above ₹2.5 lakh a year (₹5 lakh where there is no employer contribution). Our guide on whether VPF is taxable explains this rule.
- Withdrawal: tax-free after five years of continuous service; an earlier withdrawal can be taxable, with TDS in some cases.
- These rules continue under the Income-tax Act, 2025; the ₹7.5 lakh employer ceiling now applies uniformly to EPF, NPS and superannuation contributions.
Is EPF good? EPF vs FD and PPF
For most salaried employees EPF is a strong default: it is compulsory, the employer adds an equal amount, the rate (8.25% for 2025-26) has been above typical bank deposit rates, and interest is largely tax-free. The trade-off is limited access: withdrawals need eligibility, and 25% must stay in the account. PPF, at 7.1% for October–December 2026, is a separate voluntary scheme with a 15-year lock-in that anyone can open; you cannot convert EPF into PPF. Compare them with the PPF calculator and our VPF vs PPF guide.
Related reading: PF wage ceiling ₹25,000 · PF deduction from salary · PF and ESI transition, 21 November 2026 · Payroll process in India
Run PF correctly every month. The Practical Payroll Management e-Book covers PF, ESI and every statutory deduction with worked examples. Check any salary with the free PF calculator.
Frequently asked questions
Is EPF and PF the same?
In practice, yes. PF (provident fund) is the general term; EPF is the Employees' Provident Fund run by EPFO, which is what PF on an Indian payslip almost always means. PPF and VPF are different: PPF is a separate government savings scheme, and VPF is extra voluntary contribution into your EPF account.
Who is not eligible for PF?
Employees whose PF wages are above ₹25,000 a month when they join and who were never PF members before are outside mandatory coverage, though they can join voluntarily if the employer agrees. Establishments with fewer than 20 employees are not covered unless they join voluntarily or are brought in by notification.
Can I get my PF money in 2 days?
Sometimes. EPFO auto-settles many partial withdrawal claims where KYC is complete, and these can be paid within a few days. Other claims take longer. Complete Aadhaar, PAN and bank KYC on your UAN before you apply to avoid delays.
Do we get PF money back?
Yes. The EPF balance (your share, the employer's EPF share and interest) is paid on retirement or on final settlement after leaving employment, and part of it can be withdrawn earlier for specified needs. The EPS part is paid as a monthly pension after 10 years of service, or as a withdrawal benefit for shorter service.
How do I calculate my EPF?
Monthly, take 12% of your PF wages (up to ₹25,000 if your employer restricts PF) as your share, and the same 12% from the employer, of which 8.33% (up to ₹2,083) goes to EPS and the rest to EPF. Interest at the declared rate (8.25% for 2025-26) is worked out monthly on the running EPF balance and credited once a year. The EPF calculator projects your balance year by year.
Is the EPFO due date extended?
Only when EPFO issues a circular. The regular due date is 15 days after the end of the month. For example, EPFO extended the September 2026 ECR, the month the ceiling changed, to 31 October 2026. Check the EPFO website for any current extension before relying on one.
Position as of 13 November 2026. Based on the Code on Social Security, 2020, the EPF, EPS and EDLI Schemes, 2026 (notified 29 June 2026, G.S.R. 525(E) for the EPF Scheme), the PF wage ceiling of ₹25,000 from 17 September 2026, and the 2025-26 interest rate of 8.25%. Tax treatment is under the Income-tax Act, 2025. EPFO procedures and portals change often, so confirm current steps on the EPFO website. General information, not legal or tax advice.