PF interest rate

In this post, we will look at the latest PF interest rate and how it has changed over the years. Also, we will discuss the detailed procedure of calculating PF interest rate.

Current PF interest rate [Feb 2018 update]

The Employees’ Provident Fund Organisation (EPFO) has declared that interest will be applicable at the rate of 8.55% for the year 2017-18. This will affect more than 5 crore PF members, who will be getting a lower percent interest than the previous year when it was 8.65%(FY 2016-17).

Change In PF Interest Rates Over Years

The PF interest rates keep changing every year. In the below graph, you can see the EPF rate history over the past 5 years.

The latest financial year, FY 2016-17 is the lowest since FY 2012-13 when it was 8.5%. For 2017-18, the interest is to be 8.55%.

Change in PF interest rate over the years, epf rate history

Calculation of PF Interest Rate

The monthly PF contribution gets accumulated over time in our PF accounts and starts earning interest. In the section, we will see how you can calculate the monthly PF interest.

Let us first know how to calculate interest on EPF contribution.

The calculation of the actual interest received depends upon the salary of an employee and also on the break-up of employer’s PF contribution.

  • Contribution by an employee – Contribution towards EPF is deducted from employee’s salary. This is 12% of the basic salary of the employee.
  • Contribution by an employer -The contribution made by the employer is 12% of the basic salary of the employee. However, this 12% is further subdivided into:
    • Employee Pension Scheme (EPS) – 8.33%
    • Employee’s Provident Fund (EPF) – 3.67%

As we all know, if Basic+DA is less than Rs.15,000, then both the employer and employee contribution will be the same. If it exceeds Rs.15,000 then you have an option either contribute based on the original amount or restrict the calculations to Rs. 15,000.


Now, let us take an example of Siddharth who has just joined the organization in the month of June at a monthly salary of Rs 12,000(Basic+DA). We will be calculating the interest on his EPF earnings. We can see the monthly deductions and applicability of interest in the given table below.

June 1440 440.4 1880.4 Nil Just joined
July 1440 440.4 1880.4+1880.4=3760.8 1880.4*8.75%/12=Rs.13.72
August 1440 440.4 3760.8+1880.4=5641.2 3760.8*8.75%/12=Rs.27.42
September 1440 440.4 5641.2+1880.4=7521.6 5641.2*8.75%/12=Rs.41.138
October 1440 440.4 7521.6+1880.4=9402 7521.6*8.75%/12=Rs.54.84
November 1440 440.4 9402+1880.4=11282.4 9402*8.75%/12=Rs.68.55
December 1440 440.4 11282.4+1880.4=13162.8 11282.4*8.75%/12=Rs.82.26
January 1440 440.4 13162.8+1880.4=15043.2 13162.8*8.75%/12=Rs.95.97
February 1440 440.4 15043.2+1880.4=16923.6 15043.2*8.75%/12=Rs.109.69
(Total EPF at the end of the year)
12960 3963.6 16923.6+1880.4=18804 493.58

So, in the example above, the total interest that Siddharth received for his EPF contributions from June to March comes out to be Rs.493.58.

This is how interest on EPF is calculated. It is calculated for every month and given at the end of the financial year.


  • The employer shows the EPF contributions with respect to the salary due.
  • Interest amount received on EPF is rounded off to the nearest point before being credited to your EPF account.
  • In the unfortunate event of a death of an employee, the interest is payable till the month preceding the month in which death occurred.

So, this is it regarding the detailed procedure of calculating PF interest rate and change in interest rates. We hope you found it helpful.

Related: PF withdrawal forms

If you have any doubts or queries kindly drop them in the comment section below.

Image made with the help of icons from, licensed under CC 3.0 BY

Share On:

11 thoughts on “Latest PF interest rate & its procedure to calculate

  1. To which period is the EPF interest announced in feb 2018 (8.55%) applicable? Is it retrospectively applicable from Apr 2017 to March 2018? If so members who would have retired in say Sept 2017 would have their interest calculated at what rate? It would not have been 8.55% as it was announced in Feb 2018.

    1. Hello Sir,
      For the FY 2017-18 the interest will be calculated on 8.55%. So for a person who retired in Sept 2017, it would be the same i.e., 8.55%.

  2. If I get cheque of rs. 3526 per month . How much will be the part of Employer and emloyee at their interest rates ?

    1. Dear Sir,
      PF is applicable at 12% on your monthly BASIC + DA. Employer and Employee will be contributing equally to this.
      When computing interest, the declared rate will be applicable on whole of employee share and 3.67% of employer share
      i.e. if every month you contribute Rs. 1000 your employer too will contribute Rs. 1000. The interest will be calculated on 1000+367=1367.

    1. Dear Sir,
      The PF contribution is on Basic + DA. Hence, the PF will be on 6000 and DA if available.

  3. hello sir
    i have left my last job in the year 2017 June , from that time i am not working , what is the pattern of interest i will receive , will i get interest till june 2017 , or shall i get interest till july 2018 , the day i claimed my pf amount .
    Also for final pf settlement , i have worked in 3 companies all have deducted pf but did not joined combined my uan , in last company before quitting i linked all the pf account into my last pf account .
    So i am not sure how much interest i will gain , suppose on june 2017 my total pf accumulated was 75,000+35,000 pension . will i get interest @ 8.55% for 75,000 from june-2017 to july 2018 , or it shall be limited to june 2017.
    means how should i calculate the interest on final pf settlement , when no pf is credited to my pf account from last one year .

    1. Hello sir,
      1. PF amount will be taken up to last working day.
      2. Regarding interest calculation it will be up to Jun -2017 only and interest rate will be that of FY 2017-2018

  4. i have worked in 3 organizations
    Company A – 50000 PF balance for duration of (2013-2015)
    Company B – 35000 PF balance for duration of (2015-2017)
    Company C – PF Not Available for duration of (2017-2018)

    i just joined the company with PF component so can you please brief how interest calculation will be done ?

    thanks in advance.

Comments are closed.