Last updated: October 2026 Β· 3 min read
The Employees’ Provident Fund (EPF) is a retirement savings scheme run by the EPFO for salaried employees. For 2025-26, EPFO retained the interest rate at 8.25%, the same as 2024-25, benefiting over 7 crore members.
How contributions work
| Component | Contribution |
|---|---|
| Employee | 12% of basic salary + dearness allowance |
| Employer | 12% of basic + DA, split as below |
| Employer share to EPS (pension) | 8.33% of wages, capped at βΉ15,000 wages (max βΉ1,250 a month) |
| Employer share to EPF | Remaining 3.67% (more if wages exceed the cap) |
| Employer to EDLI (insurance) | 0.5% (paid separately) |
How interest is calculated
Interest is calculated monthly on the running balance at the end of each month, using rate Γ· 12, and is credited to your account once a year after the financial year ends. No interest is paid on the EPS (pension) portion.
Worked example
Basic + DA = βΉ30,000 a month. Employee contribution = βΉ3,600; employer’s EPF share = βΉ3,600 – βΉ1,250 = βΉ2,350. Monthly EPF credit = βΉ5,950.
With an opening balance of βΉ2,00,000, monthly interest at 8.25% Γ· 12 (0.6875%) is calculated on each month’s closing balance. Over the year, total interest comes to roughly βΉ19,000-βΉ19,500, credited after March.
EPF interest rate history (recent)
| Year | Rate |
|---|---|
| 2025-26 | 8.25% |
| 2024-25 | 8.25% |
| 2023-24 | 8.25% |
| 2022-23 | 8.15% |
| 2021-22 | 8.10% |
| 2020-21 | 8.50% |
Tax on EPF
- Employee contributions qualify for deduction under the old regime (within the βΉ1.5 lakh limit).
- Interest on employee contributions above βΉ2.5 lakh a year (βΉ5 lakh if no employer contribution) is taxable.
- Withdrawal after 5 years of continuous service is tax-free.
- Employer contribution to EPF, NPS and superannuation above βΉ7.5 lakh a year is taxable.
How to check interest credit
Use the EPFO member passbook portal, the UMANG app, SMS to 7738299899 (“EPFOHO UAN”) or a missed call to 9966044425 from your registered mobile. Interest for a year usually appears a few months after the rate is notified.
Frequently asked questions
What is the EPF interest rate for 2025-26?
8.25%, as recommended by EPFO’s Central Board of Trustees and approved by the government.
Is EPF interest compounded?
Interest is calculated monthly and credited annually, so it compounds yearly.
Does the employer contribution earn interest?
Yes, the EPF portion does; the EPS portion goes to the pension fund and does not earn account interest.
Keep exploring
- How to check your PF balance
- PF withdrawal rules
- UAN activation and KYC
- More PF & Pension articles on Tiwaripedia
This article is for general information, not financial, tax or legal advice. Rates, limits and rules change; always confirm on the official website or with a qualified advisor before you act. Spotted something that needs updating? Let us know.
