EPF Interest Rate 2022-23


The Employee Provident Fund (EPF) is a financial instrument managed by the Employee Provident Fund Organization (EPFO) in India. EPFO provides financial security to salaried employees during their retirement years. One of the important features of the EPF scheme is the interest rate provided on the contributions, which impacts the savings and financial well-being of the account holders.

In this article, we will get into the details of EPF interest rates, how they are calculated, and their importance for individuals in the workforce.

Recent Update on EPF Interest Rate

As of the financial year 2022-23, the EPFO has declared an interest rate of 8.15% for Employees’ Provident Fund accounts. This announcement was made through a circular dated July 24, 2023. It’s significant for EPF account holders to stay updated on these interest rates, as they can affect the growth of their retirement savings.

EPF Interest Rates Over the Year

The EPF interest rate is subject to an annual review by the EPFO’s Central Board of Trustees in consultation with the Ministry of Finance. The interest rate for the fiscal year 2022-23 has been fixed at 8.15%. We have also provided details on how it changed over time.


These rates reflect the government’s efforts to balance the interests of employees with the financial sustainability of the EPF scheme.

Key Points to Remember About EPF Interest Rate

The current interest rate on EPF deposits is 8.15%. Its interest is calculated monthly, but the amount is credited to the Employees’ Provident Fund account once a year, specifically on March 31st of the fiscal year.

If no contributions are made to an EPF account for 36 consecutive months, the account becomes dormant or inoperative. However, employees who have not yet reached retirement age might still earn interest on their inactive accounts.

The principal amount and the accrued interest in an EPF account are exempt from income tax during withdrawal, making this a tax-efficient retirement savings option.

EPF contributions consist of both employee and employer contributions. If the employee contributes 12% of their basic salary plus dearness allowance (DA), the employer also contributes a similar amount.

A part of the employer’s contribution (8.33%) goes towards the Employee Pension Scheme (EPS) subject to a ceiling of ₹1,250 per month if the employee’s salary is ₹15,000 or more. The remaining 3.67% is added to the employee’s EPF account, and the employer also contributes 0.50% towards the Employee’s Deposit Linked Insurance (EDLI) account of the employee.

Employees have the option to voluntarily contribute more than the statutory requirement of 12% through the Voluntary Provident Fund (VPF). The VPF also provides tax-free interest, but employers are not required to contribute to it if the employee opts for it.

How to Calculate EPF Interest

Calculating the interest on your EPF contributions is a simple process, despite it being credited annually. Let’s understand it with an example:

  • Basic Salary + Dearness Allowance = ₹30,000
  • Employee’s contribution towards EPF = 12% of ₹30,000 = ₹3,600
  • Employer’s contribution towards EPS (subject to the limit of ₹1,250) = ₹1,250
  • Employer’s contribution towards EPF = (₹3,600 – ₹1,250) = ₹2,350
  • Total EPF contribution every month = ₹3,600 + ₹2,350 = ₹5,950

Given the EPF interest rate for 2022-2023 is 8.15%, the monthly interest rate is calculated as 8.15% / 12 = 0.00679166666. As previously mentioned, although interest is calculated monthly, it is only credited to the account at the end of the financial year.

Assuming the employee joined service on April 1, 2022, contributions for the financial year 2022-2023 begin in April 2022. Here’s how the interest is calculated:

  • Total EPF Contribution for April = ₹5,950
  • April Interest on the EPF Contribution = Nil (No interest for the first month)
  • EPF account balance at the end of April = ₹5,950
  • EPF Contribution for May = ₹5,950
  • Total EPF account balance as of May = ₹11,900
  • Interest on the EPF contribution for May = ₹11,900 × 0.7083% = ₹84.29

This example shows how interest is paid on your EPF contributions throughout the year, increasing your retirement savings.

So, we can say that the EPF scheme plays an important role in securing the financial future of employees in India. The annual interest rate is a significant factor in determining the growth of one’s retirement savings, and staying informed about these rates is significant for effective financial planning. Understanding the calculation of EPF interest empowers employees to make informed decisions and optimize their retirement savings.