Scroll Top


    Employee Provident Fund

    What Is Employee Provident Fund (EPF)?

    The Employee Provident Fund (EPF) is a retirement benefits scheme in which employees of an organisation contribute a small portion of their basic pay monthly. In the same line, the employer also contributes a similar amount on their behalf towards the scheme.

    Understanding EPF

    When contributed together over a long period, the contribution grows and forms a considerable corpus at the time of retirement. The corpus is generally used to fund the employee's retirement. However, employees can choose to withdraw their EPF partially under certain circumstances.

    Every employee is allotted a unique Universal Account Number (UAN) by the Employee Provident Fund Organisation (EPFO). The employee's EPF account is linked with the UAN which is valid throughout the employee's life. Also, employees need not apply for the transfer of their EPF accounts when switching between jobs.

    How does EPF work?

    Under the EPF Act, all organisations with more than 20 employees are required to register with the EPFO. When an individual starts working in an establishment with more than 20 employees, both the individual, i.e. the employee, and the employer are required to contribute 12% of the basic pay to the EPF account.

    While the entire 12% of your basic pay is directed towards your EPF account, such is not the case with the employer's contribution. Though the employer matches your 12% contribution, only 3.67% of the contribution goes into your EPF account. The remaining 8.33% of the employer's contribution is directed towards your Employee's Pension Scheme.

    The government pools all such funds with the help of trusts which, in turn, invests them in securities and generate an interest rate in the range of 8% p.a. and 13% p.a. Your EPF account remains active as long as you are being paid by your employer.

    Employees can update the new organisation with their EPF account details in the event of a job change. This will ensure that contributions towards the EPF account continue even after switching to another company or establishment.

    Popular Topics

    Latest Articles

    Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

    Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

    CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

    Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

    Cleartax is a product by Defmacro Software Pvt. Ltd.

    Company PolicyTerms of use


    ISO 27001

    Data Center


    SSL Certified Site

    128-bit encryption