Estimate monthly employee and employer EPF contributions on PF wage. This is a simplified employer-cost model — not a payslip replica.
Reviewed July 2026 · FY 2026–27 (AY 2027–28) tax slabs in engine · Methodology
Employer-side EPS diversion is not modeled separately — see accuracy card.
Engine snapshot: PF wage ₹15,000/month with default ceiling rules → employee ₹1,800/mo, employer ₹1,800/mo, total ₹3,600/mo (simplified).
Employers split contributions across EPF/EPS/EDLI and may use different wage definitions.
Employees' Provident Fund (EPF) is the statutory retirement savings scheme that applies to establishments with 20 or more employees in India. For salaried employees covered by EPF, the scheme determines a mandatory deduction from your payslip every month — and a matching employer contribution. Understanding how EPF works helps you accurately estimate both your take-home salary and your long-term retirement corpus.
The contribution rate for both employee and employer is 12% of the PF wage. PF wage is defined as Basic salary plus Dearness Allowance (DA). Critically, this is not gross salary and not CTC — it is specifically Basic + DA. Many employers keep Basic salary at 40–50% of gross to manage their EPF contribution cost. The result: two employees with the same gross salary at different employers may have different PF deductions if their Basic+DA splits differ.
Of the employer's 12% contribution, 8.33% goes to the Employees' Pension Scheme (EPS) — capped at a wage ceiling defined by EPFO rules — and the remainder goes into the EPF corpus. The employee's full 12% goes to EPF. When you see "employer PF" in a CTC breakup, it includes both these streams. Employees cannot access the EPS share directly at withdrawal — it is part of the pension fund and has different rules at retirement. These nuances are why employer PF in CTC does not translate linearly to your EPF balance.
Employees can contribute beyond the statutory 12% through Voluntary Provident Fund (VPF) — up to 100% of Basic+DA. VPF has the same interest rate as EPF and the same tax treatment. If you are looking to increase tax-efficient long-term savings beyond 80C (which EPF counts toward), VPF is one mechanism — but it further reduces your monthly in-hand. Use this calculator to see how different PF wage levels and voluntary contributions change your monthly cash balance.
The Employees' Provident Fund (EPF) is a mandatory retirement savings scheme under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. Both you and your employer contribute — which is why most payslips show two PF lines: "Employee PF" (deducted from your gross) and "Employer PF" (an additional cost that may or may not be inside your CTC).
Employee contribution is 12% of your PF wage (Basic + Dearness Allowance). Employer contribution is also 12%, but it is split three ways — not all of it goes to your EPF account.
The employer's 12% contribution is split into three components:
By law, employers must contribute PF only on the first ₹15,000 of monthly Basic+DA. If your Basic is ₹40,000/month, employer's statutory minimum PF contribution is 12% × ₹15,000 = ₹1,800/month — not 12% × ₹40,000.
However, many employers choose to contribute on the actual Basic+DA without the ceiling, particularly in the organized tech and manufacturing sectors. This is better for employees (more savings, higher PF balance) but adds cost to the employer and can significantly reduce your monthly in-hand if your Basic is high.
This is one of the largest sources of mismatch between a generic calculator's estimate and your actual payslip — always check your offer letter or HR portal for which PF rule applies.
Voluntary Provident Fund (VPF) allows you to contribute more than the mandatory 12% to your EPF account — up to 100% of Basic+DA. The interest rate on VPF is the same as EPF (announced annually by the EPFO, typically 8–8.5% in recent years), which is significantly higher than most bank FDs.
VPF contributions qualify for 80C deduction under the old tax regime (within the ₹1.5 lakh overall 80C cap). Interest earned up to ₹2.5 lakh of annual employee contributions (EPF + VPF combined) is tax-free. Above this threshold, interest is taxable from FY 2021-22 onwards.