Does an employer stop EPF contributions if the employee becomes a senior citizen?

EPFO: Employees' Provident Fund (EPF) is projected as a retirement scheme that provides a lump sum amount at the time of retirement and a monthly pension after that to the EPF account holder. But, have you ever thought that if you touch the retirement age of 60 and still keep working as an employee, will your employer keep contributing to your EPF and employee pension scheme (EPS) account?

It is important to know that an EPF account holder employee can contribute up to a maximum of 12 per cent of their basic pay and dearness allowance (DA) to their EPF account. Their employer also contributes an equal amount to the employee's EPF account. Of this 12 per cent, 8.33 per cent goes to the employee's EPF account, while 3.67 per cent goes to their EPS account.  

According to the EPFO's official website, employers are required to continue making EPF contributions for employees even after they attain the age of 55 or 60. The relevant guidance from EPFO states:

"The employees' provident fund contribution should be paid till the date of his leaving the service, irrespective of the age of the member. Employees who cease to be EPS (pension) members will get the employer's 8.33 percent contribution in their PF."

This helps to ensure that employees continue to benefit from EPF contributions throughout their employment tenure, providing much needed financial security regardless of their age.

What is EPF?

The Employees' Provident Fund (EPF) is a retirement savings scheme mandated by the Government of India, which provides financial security to employees after their retirement. 

The scheme is managed by the Employees' Provident Fund Organization (EPFO), one of the largest social security organisations in the world,  which works under The Ministry of Labour & Employment.

What is the eligibility for EPF?

The schemes is open for both private and public sector employees, thus all employees can enroll in this scheme. 

How to calculate interest on your EPF balance?

To calculate the interest on your EPF account balance, you need to know the monthly closing balance and prevailing EPF interest rate. You need to calculate the interest for each month separately. When you open a new EPF account, for the first month, the interest is zero as the opening balance is nil. For the second month, you can calculate the interest on EPF balance by using the following formula.

Monthly Interest on EPF = (Opening balance of the month x current rate of interest)/12

For instance, let's suppose the first month's contribution is Rs 10,000. No interest would be accrued on this. Thereafter, in the second month, the opening balance would be doubled as a fresh contribution would be made. So, the sum of Rs 20,000 would be considered for the calculation. The interest accrued would be Rs 135.83 (20000 x 8.15 per cent)/12, which would be rounded off to Rs 136. A similar calculation has to be performed for each month and adding all the balances at the end of the year would give you the annual interest amount.

EPF interest calculator
Since manually calculating the interest on your EPF balance could be strenuous, try using an online EPF interest calculator. The details you would need to enter include your basic salary plus DA, age, and the date when EPF contributions began. Thereafter, the approximate interest amount would be reflected on your screen within seconds.