EPFO interest calculation: Imporatnt News! Confused about the interest earned from EPFO? calculate like this

EPFO News Alert: Employees’ Provident Fund Organization (EPFO) is transferring interest money to investors’ account. For the financial year 2020-21, the EPFO ​​is getting 8.5% interest. It is better than FD,RD. In such a situation, if you are confused about how EPFO ​​calculates interest, then we solve your problem. Now you will be able to calculate interest easily.

Example of calculation of interest for a financial year…

• Basic Salary + Dearness Allowance = Rs 15,000
• Employee’s contribution to EPF = 12% of Rs 15,000 = Rs 1,800
• Employer’s contribution to EPS = 8.33% of Rs 15,000 = Rs 1,250
• Employer’s contribution to EPF = Employee’s contribution – Employer’s contribution to EPS = Rs.550
• Total contribution to EPF every month = Rs 1800 + Rs 550 = Rs 2,350
• Interest rate for the financial year 2019-20 = 8.50 %
• When we calculate interest, the interest rate applicable for each month is = 8.50 % /12 = 0.7083 %

• Total contribution to EPF for the first month = Rs 2,350
• Interest on EPF contribution for April = Nil (No interest received in first month)
• EPF account balance at the end of April = Rs 2,350
• Contribution to EPF account in the month of May = Rs 2,350
• Total contribution in EPF account at the end of May = Rs 4700
• Interest on EPF deposit at the end of May = Rs 4700 X 0.7083% = Rs 33.29
• That is, at the end of May, you will get an interest of Rs 33.29 on the deposit. You can calculate the interest for the coming months using this formula.