Employees' Provident Fund (EPF) Guide
How EPF contributions work, how interest is credited, when withdrawals are allowed and how tax applies.
The Employees' Provident Fund is a retirement savings scheme for salaried employees. Both you and your employer contribute each month, and the balance earns interest at a rate set by the government each year.
How contributions work
Typically, 12% of your basic pay plus dearness allowance goes in from your side, and the employer contributes a matching 12%. Part of the employer share goes to the Employees' Pension Scheme rather than your EPF balance. Your own contribution qualifies for Section 80C in the old regime.
Interest
The EPF interest rate is declared annually and has stayed above most bank deposit rates in recent years. Check the latest announced rate on the EPFO website, since it can change.
Withdrawals
- Full withdrawal is generally allowed on retirement or after a period of unemployment, subject to current EPFO rules.
- Partial withdrawals are allowed for specific needs such as medical treatment, marriage, education or buying a house, with conditions.
- Withdrawing before five years of continuous service can attract tax, so think before cashing out when changing jobs. Transferring the account is usually better.
Voluntary contributions
You can add to EPF through the voluntary provident fund (VPF), which earns the same rate. Interest on very high contributions can become taxable, so check the annual threshold.
EPF alongside other savings
EPF gives you a stable, low-risk base. Compare long-term growth with the PPF calculator and plan how much more you need using the retirement corpus guide.
Rates and rules change. Confirm with EPFO or your employer's HR before acting.
Frequently asked questions
Should I withdraw EPF when I change jobs?
Usually it is better to transfer it to your new employer's account so it keeps growing and you avoid tax and loss of compounding.
Is EPF interest taxable?
Interest is generally tax-free up to a threshold on employee contributions; interest on contributions above that is taxable.
More guides
Calculators
Last reviewed: October 2026. General education, not financial advice.