October 04, 2025
4 mins read
If you are a salaried employee in India, the Employee Provident Fund (EPF) is likely already a part of your salary structure. But what is Employees Provident Fund (EPF) exactly, and why is it so important? Simply put, EPF is a retirement savings scheme backed by the Indian government and managed by the Employees’ Provident Fund Organisation (EPFO). The primary objective of EPF is to help salaried employees like you build a financial cushion for your retirement.
Both you and your employer contribute to the EPF account every month, and this money grows over time with interest. This article will guide you through all aspects of EPF—from contribution and interest to Employee Provident Fund eligibility and withdrawal rules.
The Employees' Provident Fund Organisation (EPFO) is a statutory body under the Ministry of Labour and Employment. It oversees and regulates the EPF system across the country. Since its inception in 1951, EPFO has worked toward providing retirement benefits and social security to millions of employees in India. EPFO manages the Employees Provident Fund accounts of workers in both the public and private sectors.
This is the core component of the EPF structure. It requires both the employee and employer to contribute a part of the monthly salary into the EPF account.
EPS is linked with the EPF. A portion of the employer's contribution is directed here to provide pension benefits after the employee turns 58.
This scheme provides life insurance cover. If an EPF member dies during employment, the nominee receives an insurance benefit.
The key objectives of the EPF scheme are listed below:
Ensure every employee has a single EPF account
Simplify compliance procedures for employers enrolled in the EPF scheme
Enforce regular adherence to EPF guidelines
Improve online service delivery through the EPF portal
Make all EPF member accounts accessible digitally
Reduce EPF claim settlement time from 20 days to just 3
Promote voluntary EPF compliance among employers and workers
Every EPF member receives a 12-digit Universal Account Number (UAN). This UAN remains the same across all jobs and employers. Your EPF accounts from multiple jobs get linked to your UAN. Once activated, your Universal Account Number gives you access to the EPFO portal, where you can track your EPF balance, download your passbook, and submit claims online.
To become a member of the Employees Provident Fund, you must meet certain basic conditions set under the EPF Act. Let's have a look at the Employee Provident Fund eligibility requirements:
Employees from both the private and public sectors are eligible to join the Employees Provident Fund.
Any organisation with 20 or more employees must register under the EPF Act.
Once enrolled, members can access various EPF benefits such as the Employee Pension Scheme and insurance under EDLI.
Employee Provident Fund eligibility applies regardless of industry type, as long as the employer is covered by the EPF Act.
The EPF interest rate for FY 2024–25 stands at 8.25% per annum. EPF interest is calculated monthly on the EPF contributions made. However, the total interest for the entire year is credited at the end of the financial year, i.e. March 31st. Only the EPF portion earns interest; the EPS part does not. Interest earned is tax-free if the EPF account remains active.
EPF interest is calculated monthly by dividing the annual rate by 12. For instance, at 8.25% per year, the monthly rate is 0.6875%.
For instance, you earn a basic salary of ₹15,000. Here’s how interest on your EPF contributions will be calculated:
Basic Salary: ₹15,000
Employee Contribution (12%): ₹1,800
Employer EPF Contribution (3.67%): ₹550.5
Total Monthly EPF Contribution: ₹2,350.5
Monthly Interest: ₹2,350.5 × 0.6875% = ₹16.17 approx.
Though calculated monthly, the interest is credited at the financial year-end. This process ensures consistent tracking of your EPF balance.
You can use an online EPF calculator to estimate your total EPF corpus at retirement. Input your current age, salary, retirement age, and contribution percentage. The EPF calculator will provide a projection that includes both contributions and the interest accrued. Using this digital tool helps in planning your post-retirement financial goals.
EPF forms are required for every major activity linked to your EPF account—be it nomination, withdrawal, pension claims, or account transfers. The table below outlines the purpose of each Employees Provident Fund form and the scheme it applies to:
Form | Purpose | Applicable Scheme |
Nomination declaration | EPF & EPS | |
New employee registration | EPF & EPS | |
Insurance claim under EDLI | EDLI | |
Withdrawal benefits or scheme certificate | EPS | |
Monthly pension application | EPS | |
EPF account transfer | EPF | |
EPF Form 14 | LIC policy purchase | EPF |
EPF Form 15G | Tax-saving declaration | EPF |
Final EPF settlement | EPF | |
EPF claim after death | EPF | |
Partial EPF withdrawal | EPF |
Transferring your EPF when you change jobs ensures your retirement savings remain consolidated under a single Universal Account Number (UAN). The process is mostly online, seamless, and does not always require physical paperwork.
Access the official EPFO website and sign in with your UAN and password to begin the transfer process.
Once logged in, navigate to the ‘Online Services’ tab and select ‘One Member – One EPF Account (Transfer Request).’
You do not need new credentials—your UAN login details are sufficient to submit the EPF transfer request.
Fill in the required details about your former employer, including establishment number and member ID.
If your Aadhaar is seeded and KYC is verified, you can complete the process online without submitting Form 13.
Your old or new employer must digitally verify the submitted transfer request for it to proceed further.
After verification, you will receive a PIN on your registered mobile number. Enter it to confirm your request.
Once submitted, monitor the status of your transfer through the portal using the system-generated tracking ID.
The Employees Provident Fund offers several long-term and short-term financial advantages that support your retirement goals and emergency needs.
Your EPF contributions, along with matching deposits from your employer, earn annual interest. Over time, this compounding helps you accumulate a sizable retirement corpus, making it one of the most reliable ways to grow your long-term savings with government-backed security.
A portion of your employer's EPF contribution—8.33%—is directed toward the Employees Pension Scheme (EPS). This builds a monthly pension fund that you can access after the age of 58, providing financial support in your retirement years in addition to your EPF balance.
The EPF scheme allows partial withdrawals in specific situations such as medical emergencies, marriage, higher education, or home renovation. This makes your savings accessible when you truly need them, without needing to take on personal loans or debt during critical times.
Contributions to your EPF account are eligible for tax deductions under Section 80C, up to ₹1.5 lakh per year. Additionally, the interest earned and maturity amount are tax-free, provided you meet the five-year continuous service condition.
You are allowed to make partial withdrawals from your EPF for specific purposes such as pursuing higher studies, covering medical expenses, or constructing a house. These withdrawals come with relaxed conditions, offering financial flexibility while preserving the remaining balance for retirement.
EPF withdrawals can be either full or partial, based on your employment status and reason for withdrawal. Below are the common scenarios where each type of withdrawal is permitted:
Full Withdrawal
Retirement from active employment
Two months of continuous unemployment
Switching jobs with a 60-day gap
Partial Withdrawal
Marriage expenses
Higher education
Purchasing or building a home
Repayment of a housing loan
Home renovation
If you withdraw EPF before completing five years of service, the amount is taxable. Under Section 80C of the Income Tax Act, EPF contributions up to ₹1.5 lakh annually qualify for tax deductions. Moreover, the interest earnings are also tax-free while the account is active. TDS applies if withdrawal exceeds ₹50,000 before five years of continuous service.
EPF members can withdraw their funds either offline by visiting the EPFO office or online through the UAN portal. Both methods require certain prerequisites and documentation. Here is a breakdown of the steps involved in each process:
Mode | Steps |
Offline Process | Step 1: Fill out the Composite Claim Form (either Aadhaar-based or non-Aadhaar based) depending on your KYC status. Step 2: Submit the completed form to the EPFO office under your jurisdiction. Step 3: The form must be attested by your employer if it is not Aadhaar-based. |
Online Process | Step 1: Ensure your Universal Account Number (UAN) is active. Step 2: The mobile number used to activate your UAN should also be functional. Step 3: Link your UAN with Aadhaar, PAN, and your bank account with the correct IFSC code. Step 4: Log in to the UAN member portal. Step 5: Verify your KYC details and follow the on-screen instructions to submit the claim. |
If you face issues related to your EPF account—such as delays in withdrawal, settlement of pension, or transfer of funds—you can raise a complaint through the official EPFO grievance portal. This process is available to employees, employers, and pensioners. To register your grievance, follow the steps below:
Visit the official EPFO grievance site at https://epfigms.gov.in/
Click on the ‘Register Grievance’ button on the top menu bar.
Once the grievance form appears, choose your role (Employee, Employer, or EPS Pensioner).
Enter your PF account number and the regional EPFO office address.
Provide the name and address of your employer.
Fill in your personal details, such as name, postal address, PIN code, country, phone number, and email ID.
Select the type of complaint from the dropdown menu (e.g., withdrawal, transfer, pension settlement).
Upload your grievance letter or supporting document, enter the CAPTCHA code, and submit the form.
Your EPF is not just another line in your payslip—it is your money set aside for your future. Whether you are just starting your career or close to retiring, understanding how your Employees Provident Fund works can make a real difference.
Keep track of your UAN, stay updated on your balance, and do not wait until the last moment to figure out how withdrawals or transfers work. Take a little time now to understand your EPF—it is a small effort that pays off in the long run.
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No, once you’ve resigned from the job, you cannot contribute to the EPF account.
EPF contributions are calculated based on the actual basic wages, dearness allowance (including the cash value of any food concession), and retaining allowance (if any) earned during the entire month. This holds true whether wages are paid daily, weekly, fortnightly, or monthly.
In case of default, the EPFO can initiate recovery proceedings under the EPF Act, which may include attaching the employer’s bank accounts, property seizure, and legal action. Interest, damages, and penalties continue to accrue until the outstanding amount is cleared.
There is no upper age limit to join the Employees Provident Fund. However, to be eligible for benefits under the Employees Pension Scheme (EPS), you must join EPF before the age of 58, as pension benefits begin at that age.
You should first raise the issue with your employer or HR department. If it remains unresolved, you can file a complaint through the EPFO’s official grievance portal https://epfigms.gov.in or contact your regional EPF office.
No, each employee should have only one Universal Account Number (UAN) for their entire working life. If multiple UANs have been created due to job changes, they must be merged using the “One Employee – One EPF Account” feature on the EPFO portal.
If there are no contributions for 36 consecutive months, the EPF account is classified as inoperative. Interest stops accruing, but the principal and existing interest remain safe. You can claim the amount at any time by filing a withdrawal request.
Yes, if your UAN is KYC-compliant, which means it should be linked to your PAN, Aadhaar, and bank account), you can initiate EPF withdrawal online without employer approval. For offline or non-KYC accounts, employer attestation may still be required.
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