EPF Interest Rate 2025: How to Calculate the Interest Rate of EPF Contribution

By Mayashree Acharya

|

Updated on: Aug 25th, 2025

|

2 min read

The EPF interest rate for FY 2024-25 is 8.25% per annum, and is applicable on all contributions made between April 1st, 2024, and March 31st, 2025. EPF interest is calculated monthly on the closing balance, but is credited annually. EPF interest earned is tax-free. However, the interest earned on employee contributions exceeding Rs. 2.5 lakh in a financial year is taxable. For government employees, this threshold limit is Rs. 5 lakh.

Key Highlights

  • Employee contributes 12% of basic salary + dearness Allowance, while the employer’s share is split between EPF (3.67%) and EPS (8.33%).
  • Employees can also claim tax deductions up to ₹1.5 lakh under Section 80C for EPF contributions.
  • If no contributions are made to the EPF account for 36 consecutive months, the account becomes inoperative.
  • The principal and interest are tax-free, making it is a popular retirement plan among the salaried class.
     

Current and Historical EPF Interest Rates

The EPF interest rate is reviewed annually by EPFO’s Central Board of Trustees in consultation with the Ministry of Finance. For the financial year 2024-2025, it is fixed at 8.25%. The interest rates for the past years are listed below.

Financial YearRate of Interest p.a.
2024-20258.25%
2023-20248.25%
2022-20238.15%
2021-20228.10%
2020-20218.50%
2019-2020 to 2020-20218.50%
2018-20198.65%
2017-20188.55%
2016-20178.65%
2015-20168.80%
2013-2014 to 2014-20158.75%
2012-20138.50%
2011-20128.25%
2010-20119.50%
2005-2006 to 2009-20108.50%

EPF Interest Rate FY 2024-2025

The EPF Interest Rate for FY 2024-25 is fixed at 8.25%. The EPF interest is calculated monthly on the EPF contributions, but deposited into the EPF account only on 31st March of the applicable financial year. Thus, the total interest for the year will be credited at the end of the financial year. For an interest rate of 8.25%, the monthly interest calculation will be considered as 0.688%, i.e., 8.25% divided by 12 months.

EPF Interest Calculation 2025

The employee’s EPF contribution is 12% of basic salary + dearness allowance, while the employer’s EPF contribution of 12% is divided into two parts - 8.33% towards the EPS account, up to a maximum of Rs 1,250 per month, and the balance 3.67% is transferred to the EPF account. 

For example, if an employee’s basic salary + dearness allowance is Rs. 50,000: 

  • Employee contribution to EPF (12% of Rs. 50,000): Rs. 6,000.
  • Employer contribution to EPS (8.33% of Rs. 15,000): Rs. 1,250.
  • Employer contribution to EPF (6,000 - 1,250): Rs. 4,750.

The total EPF contribution for a month will be ( Rs. 6,000 + Rs. 4750): Rs. 10,750.

Total EPF contribution in the above case for the first month of joining the service = Rs. 10,750.

Interest Rate: 8.25% / 12 months = 0.688% per month

Interest on the EPF contribution for the 1st month = Nil 

EPF account balance at the end of the 1st month = Rs. 10,750 

EPF contribution in the 2nd month = Rs. 10,750

Total amount accumulated in the 2nd month of service = Rs. 21,500 (Rs. 10,750 + Rs. 10,750)

Interest accrued on the EPF contribution in the 2nd month = Rs. 21,500 * 0.688% = Rs.147.92

A similar calculation is done for all other months of the year.

The total EPF balance at the end of the year will be the sum of the employer contribution, employee contribution, and monthly interest accrued during the year. 

EPF Interest Calculator

To calculate your EPF fund after retirement, go to the EPF calculator.

Taxation on EPF Interest

Interest received on the employee’s contribution to the EPF account above Rs. 2.5 lakh in a financial year is taxable in the hands of the employee. The interest is also subject to TDS. However, the interest accumulated on EPF contributions within Rs. 2.5 lakh is tax-free. Employees can also claim tax deductions on EPF contributions up to Rs. 1.5 lakh under Section 80C of the Indian Income Tax Act, 1961.

What Happens If EPF Contribution Is Not Paid?

An EPF account becomes inoperative or dormant if EPF contributions are not made into an EPF account for a continuous 36 months. EPF interest will be credited to the employees' accounts until they become inoperative or dormant. However, interest will not be credited to the inactive EPF accounts. 

In Summary,

The EPF interest rate for FY 2024-25 is 8.25%, making it a reliable retirement savings option for salaried employees. Interest is calculated monthly and credited annually, ensuring steady compounding growth. With tax benefits under Section 80C, EPF remains more rewarding than many traditional savings schemes. Employees should stay updated on EPF rates, understand taxation rules, and use an EPF calculator to plan their retirement corpus effectively.

Related Articles
PF calculator 
Online Withdrawal of EPF 
Employees’ Provident Fund Organisation (EPFO)
How To Withdraw PF Amount Online
EPFO Claim Status

Frequently Asked Questions

Is EPF interest credited monthly or yearly?

The EPF contribution is credited to the EPF account every month, and interest is computed monthly. However, the total interest for the entire financial year will be credited at the end of the financial year.

Is the EPF interest rate fixed or variable?

The EPF interest rates are fixed by the government. The government revises the interest rate from time to time. Currently, the government has fixed the EPF interest rate for the financial year 2024-25 at 8.25%.

What is the method of crediting EPF interest to the subscribers?

The compound interest is credited monthly at the statutory rate declared by the government for each year. For 2024-25, the interest rate declared is 8.25%.

Will EPF interest be credited to my account even when there is no EPF contribution?

Yes, EPF interest will be credited to an account even when there has been no contribution for 3 years. Thus, if your EPF account has no contribution due to unemployment or Non-Resident Indian (NRI) status, you will get interest for 3 consecutive years from the stopping of contribution.

Till what time will I get EPF interest in my account?

You will get EPF interest for up to 3 years after retirement. After 3 years of no contribution to your EPF account, it becomes inoperative and will not earn any interest.

Will I face a loss when there is a delay in the updation of EPF interest in my passbook?

No, you will not suffer any financial loss if there is a delay in updating the interest in your passbook. Updating the member passbook with EPF interest is an entry process. The date on which the EPF interest is entered in the member passbook has no financial bearing as the interest earned for the year is added to the closing balance of that year, and it becomes the opening balance for the next year.

Does PF interest stop after certain number?

If no contributions are made to a PF account for 3 consecutive years, the account will stop earning interest after the third year.
 

Is 100% withdrawal of PF amount withdrawable?

If the individual is unemployed for the next 2 months, then they can withdraw 100% of amount.

Will the interest accumulate if I don't withdraw balance from my PF account?

Yes, interest on PF account will continue to accumulate and the account will be active.

About the Author
author-img

Mayashree Acharya

Senior Content Writer
social icons

I am an advocate by profession and have a keen interest in writing. I write articles in various categories, from legal, business, personal finance, and investments to government schemes. I put words in a simplified manner and write easy-to-understand articles. Read more

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.

Office Address - Defmacro Software Private Limited, C 245A, Ground floor, Room No 1, Vikas Puri, West Delhi, New Delhi, Delhi 110018, India

Cleartax is a product by Defmacro Software Pvt. Ltd.

Privacy PolicyTerms of use

ISO

ISO 27001

Data Center

SSL

SSL Certified Site

128-bit encryption