EPF Calculator Online
EPF Calculator is an online tool that helps estimate the EPF corpus on retirement. All you must do is provide the basic details like retirement, basic salary, age, annual expected salary increase, and contribution to EPF.
With the estimated value of retirement, you plan your retirement. You can evaluate whether or not the corpus created meets your financial need for retirement accordingly and whether you need to invest more in other investment alternatives to meet your financial needs.
What is an EPF?
Most of us in the salaried class probably work in private companies and earn some decent money compared to government jobs most Indians year. To help salaried employees working in these secret organizations get retirement benefits, the Employees Provident Fund Organisation (EPFO) introduced the Employee Provident Fund scheme. Any organization or firm with 20 or more employees receives this benefit. Employees under the EPF make a fixed contribution of their basic salary and dearness allowance. Simultaneously, the employer also makes an equal contribution to the scheme. At the time of retirement, the worker can take out a lump sum, which includes the contributions of both employee and employer with the interest payments.
Employees under this scheme contribute 12% of their basic salary and dearness allowance, and the employer also donates 12%. After consulting with the Ministry of Finance, the EPFO Board of Trustees fixed the interest at 8.1% for FY2022.
In the case of employers, 12% has contributed, and only a small part goes to the EPF account. Out of the 12%, 8.33% goes towards Employee Pension Scheme Account, and the balance of 3.67% had parked in the employee EPF account.
How can EPF Calculator help you?
An EPF (Employee Provident Fund) calculator can help you in various ways, such as:
- With an EPF calculator, you can predict your future EPF corpus by providing details of your current monthly EPF contribution and expected annual salary increment.
- Use the calculator to plan for your retirement by determining the amount you need to contribute to your EPF account to achieve your desired retirement corpus.
- Evaluate multiple scenarios by entering different EPF contribution rates and expected annual salary hikes, helping you choose the most suitable option.
- Compare EPF investment returns with other options to decide on the best investment strategy to maximize your returns.
How to use EPF Calculator?
EPF Calculator is used to easy. You require to add the inputs and instantly get the results.
- Enter your basic monthly salary.
- Add your current age.
- Add the age at that you will retire. The retirement age will vary in the middle of companies. However, the maximal retirement age for private-sector employees is 65 years.
- Add your assembled EPF balance, if you are aware, along with your worker's contribution and your contribution as a percentage.
- Enter 12% in the box for the employee's EPF contribution and the employer's EPF contribution
- Enter the current Employees Provident Fund rate of interest and hit Calculate
- EPF calculator will calculate the total contribution, interest income, and maturity amount
You can also add the increment you expect every year and recalculate the EPF amount you can expect at retirement. If you wish to increase your basic monthly salary, add the expected figure and calculate it again. It will help you better understand how much money you can accumulate through your EPF scheme.
You can also look at the difference between the total amount invested and the amount after maturity in a graphical manner.
What is the formula of the EPF calculator?
The contribution made by the worker equals 12% of their Basic Pay plus Dearness Allowance (DA). When the Basic Pay + DA is less than or equal to Rs 15000, the employee contribution is 12% of Basic Pay + DA, whereas the employer contribution is 3.67% of the Basic Pay + DA.
How does an EPF calculator work?
Let us have an example to understand how the Employees Provident Fund calculator works.
Dearness allowance + Employees basic salary = Rs.14000
Employees contribution towards the EPF = 12% * 14000 = Rs.1680
Workers contribution towards the EPF = 3.67% * 14,000 = Rs.514
Employers contribution towards EPF = 8.33% * 14000 = Rs 1166.
The total contribution by the worker and employee towards the Employees' Provident Fund account of the employee = is Rs 1,680 + Rs 514 = Rs 2194.
The interest rate is 8.1% for FY 2022-2023.
So the rate of interest applicable for every month is:
8.1%/12 = 0.675%
Assuming the worker joined the Firm XYZ in April 2019. The total Employees Provident Fund contribution for April will be Rs.2194. The Employees Provident Fund scheme will not pay any interest for April.
The total Employees' Provident Fund contribution for May = is Rs 4,388 (Rs 2,194+ Rs 2,194). A worker receives an interest of Rs 4,388 * 0.70833% = Rs 31.08.
Similarly, the calculation had done for the subsequent months.
Benefits of EPF Calculator:
An EPF account has several benefits, some of which has highlighted hereunder.
- EPF account offers one of the country's highest interest rates and can use as an effective tool for long-term capital appreciation
- EPF can help build a good corpus for retirement that can meet the members' various needs in the post-retirement period
- Members can get a tax deduction for their contribution to EPF under section 80C up to Rs. 1,50,000; withdrawal from PF is also tax-free, subject to conditions. The interest earned from EPF is also tax-free, up to Rs. 2,50,000 for members.
- Members are allowed pre-mature withdrawals from the PF account under certain circumstances like medical emergencies, children's higher education, wedding expenses, etc.
FAQ'S
Is the EPF calculator free to use?
The EPF calculator is a free online tool for calculating EPF contributions and maturity.
How is EPF calculated manually?
To calculate EPF manually, you must know your primary salary, dearness allowance, contribution, employer contribution, and current EPF interest rate. The interest rate is calculated monthly and added to the EPF contribution from the second month.
How many times can I use the online EPF calculator?
There is no fixed upper cap on how often you can use the service. You can use it as so many times as necessary.
Can I use the same Employees Provident Fund calculator even after changing jobs?
You can use the same Employees Provident Fund calculator to estimate potential returns. You must enter the current EPF balance and update your basic salary for an accurate estimate.