EPF: What retirement EPF amounts will be on basic salaries of Rs 12,000, Rs 15,000, and Rs 20,000; get calculations

EPF Calculation: Employees' Provident Fund (EPF) is a retirement scheme for employees working in the private sector. Salaried employees working in organised sector get the benefit of this scheme. General Provident Fund (GPF) is its equivalent for government employees.

The EPF option is available to employees working for a private sector company with more than 20 employees.

The employee and the employer contribute in equal proportions to the EPF account of the former.

Both of them can contribute up to a maximum of 12 per cent of the employee's basic salary and dearness allowance (DA).

Of the 12 per cent contribution from the employer's side, 8.33 per cent goes to the EPF, while 3.67 per cent goes to the Employees' Pension Fund.

The central government decides the interest rates of EPF every year.

For the financial year 2023-24, the EPF interest rate is 8.25 per cent compounded annually.

Contributions of up to Rs 1.50 lakh in a financial year are tax-exempt in the EPF.

The interest earned and the maturity amount are also tax-free.

Retirement fund on Rs 12,000, Rs 15,000, and Rs 20,000 salaries

EPF is such a guaranteed return scheme that if you start early, contribute a full per cent of your basic salary, and increase the amount by 10 per cent every year, you can gather a large retirement corpus.

For our calculation, we are assuming that one will start contributing at 25 years of age, contribute a full 12 per cent, and keep increasing the amount by 10 per cent annually.

Here's what the retirement corpus will be: 

If your basic salary is Rs 12,000, your total contributions will be Rs 93.67 lakh, the interest earned will be Rs 1.61 crore, and the maturity amount will be Rs 2.54 crore.

If your basic salary is Rs 15,000, your total contributions will be Rs 1.17 crore, the interest earned will be Rs 2.01 crore, and the maturity amount will be Rs 3.18 crore.

If your basic salary is Rs 20,000, your total contributions will be Rs 1.56 crore, the interest earned will be Rs 2.68 crore, and the maturity amount will be Rs 4.24 crore. 

(Note: The above figure regarding the EPF corpus is a calculation. These are not actual figures. It may change depending on the salary, age, interest rate and annual salary increment of the employees.)