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Employees’ Provident Fund (EPF) and VPF

EPF pays 8.25% a year for 2025-26, more than any small savings scheme. You and your employer each put in 12% of your basic pay; on ₹30,000 a month that builds to about ₹2.17 Cr over a career, if your salary rises 5% a year.

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EPF at a glance

Employees' Provident Fund key facts
Interest rate8.25% a year (2025-26)
Your contribution12% of basic pay + DA, deducted from salary
Employer contribution12%: 8.33% of up to ₹15,000 to the pension scheme (EPS), the rest to EPF
Who is coveredEmployees of establishments with 20 or more staff; compulsory up to ₹15,000 basic
VPFExtra voluntary contribution up to 100% of basic + DA, same rate
TaxEmployee share under 80C (old regime); interest and withdrawal tax-free within limits
InsuranceEDLI life cover of up to ₹7 lakh, at no cost to you
AccountOne UAN for life; transfer it when you change jobs

Where your 24% goes

On a basic pay of ₹30,000 a month:

  • You: ₹3,600 (12%) into EPF.
  • Your employer: ₹1,250 into the Employees’ Pension Scheme (8.33% of the ₹15,000 wage ceiling) and the remaining ₹2,350 into EPF.

So ₹5,950 a month earns EPF interest. The EPS part does not earn interest; it pays a pension from 58 once you have 10 years of service.

Worked example: a career's EPF

Starting at 25 on ₹30,000 basic, with pay rising 5% a year and the rate at 8.25% until 58:

  • EPF alone: about ₹2,16,93,092, of which ₹1,52,70,385 is interest.
  • With 10% VPF on top (22% in all from you): about ₹3,17,35,099.

Try your own salary and age in the EPF calculator.

Withdrawal rules

In October 2025 EPFO’s Central Board of Trustees replaced 13 separate withdrawal reasons with three: essential needs (illness, education, marriage), housing, and special circumstances. The changes it approved:

  • 12 months of service is enough for any partial withdrawal.
  • Up to 100% of the eligible balance, employee and employer share, can be withdrawn, but 25% of your contributions must stay in the account.
  • Education withdrawals up to 10 times and marriage up to 5 times in your career.
  • If you stop working, final settlement of the EPF account after 12 months without a job, and of the pension account after 36 months.

At retirement (58) you can withdraw the full balance. Claims are filed online on the EPFO member portal or UMANG, using your Aadhaar-linked UAN.

Tax on EPF

  • Contributions: your share counts under Section 80C (now Section 123 of the Income-tax Act, 2025) in the old regime. Employer contributions are tax-free up to ₹7.5 lakh a year across EPF, NPS and superannuation.
  • Interest: tax-free on your contributions up to ₹2.5 lakh a year (₹5 lakh if your employer does not contribute); interest on anything above that is taxed every year.
  • Withdrawal: tax-free after 5 years of continuous service. Earlier, it is taxable and TDS of 10% applies above ₹50,000.

How to check your EPF balance

  • Online: the EPFO member passbook site or the UMANG app, with your UAN.
  • Missed call: 9966044425 from the mobile number registered with your UAN.
  • SMS: “EPFOHO UAN” to 7738299899.

Your UAN must be activated and linked with Aadhaar and your bank account; your employer’s HR team can help if it is not.

EPF compared with the alternatives

  • PPF pays 7.1% with no ₹2.5 lakh cap on tax-free interest, and is open to the self-employed.
  • NPS can earn more through equity and gives an extra ₹50,000 deduction under the old regime.
  • VPF is usually the best fixed-return option for salaried people, at 8.25%.

Frequently asked questions

What is the EPF interest rate for 2025-26?

8.25% a year, declared by EPFO’s Central Board of Trustees and notified by the government. Interest is worked out on the monthly balance and credited to your account once a year.

How do I check my EPF balance?

Log in to the EPFO member passbook site or the UMANG app with your UAN and password, give a missed call to 9966044425 from your registered mobile, or send an SMS “EPFOHO UAN” to 7738299899. Your UAN must be activated and linked to Aadhaar.

How much of my EPF can I withdraw while still working?

Under the rules approved by EPFO in October 2025, after 12 months of service you can withdraw up to all of your eligible balance (employee and employer share) for essential needs, housing or special circumstances, as long as 25% of your contributions stays in the account.

Is EPF withdrawal taxable?

Not after 5 years of continuous service (jobs with EPF transferred count together). Before that, the employer’s contribution and the interest are taxable, and TDS of 10% is deducted if the amount is over ₹50,000.

Is EPF interest taxable?

Interest on your own contributions above ₹2.5 lakh a year (₹5 lakh if your employer does not contribute) is taxable each year. Interest on contributions within that limit is tax-free.

What is VPF?

Voluntary Provident Fund: you ask your employer to deduct more than 12% of your basic pay, up to 100%. It earns the same 8.25% and has the same tax treatment as EPF; your employer does not add to it.

Sources

Last checked on 6 October 2026. The interest rate is declared once a year by EPFO’s Central Board of Trustees.