The Employees Provident Fund (EPF) is a retirement scheme that is meant to look into the life of employees once they retire. Employee shave to make monthly contributions after which they can withdraw their savings after hitting the retirement age. This scheme is applicable to every employee whether you are working in the public or private sector. The good thing about this fund is that you can withdraw some amounts before your account matures.You can then use these funds for medical reasons, educations purposes or securing a home loan. However, you must have a certain amount of money before enjoying numerous benefits that EPF has to offer.
Members of the Employees Provident Fund can now get the chance to calculate PF balance without UAN number in passbook.epfindia.gov.in website seeking the help of PF officers.However, to perform this action, you must be aware of all the contributions that you and your employer make. In most cases, the employee’s contribution is usually 10%-12% of the employee’s basic monthly salary together with the dearness Allowance. New employers joining the EPFO will not have to contribute.This is because the government will make the employers contribution of 12% during the first three years of your employment.
EPFO calculation is done on a monthly basis i.e. Basic Salary+ DA. However, when your current income is above the wage ceiling then you will have to rely on three methods for calculating the PF amount.
When using the first method to calculate the PF amount for employees, you will have to add 12% of Basic salary together with the DA. This contribution is added together with the employer’s contribution, which is usually 12% of Basic pay minus 8.33% of Rs. 15,000. With these calculations,you can come up with the correct estimate of employers PF balance.
With method 2, you will have to take the employees contribution of 12% basic pay plus DA. You will then have to add this amount to the employer’s contribution, which is 3.67% of Rs. 15000.
Method 3 of PF calculation involves adding an employee’s contribution, which is 12% of basic salary to an employer’s contribution that is usually 3.67% of Rs. 15000.
With the above methods, you will never encounter a problem when calculating the PF balance for salaried employers. After, computing the contributions of the employee and employer, you will also have to calculate the interest. To calculate the interest, you will have to base it on the opening balance of each month. Since the opening balance of the first month is zero, the interest of the month would be zero. For the second month, you will have to calculate the interest in regards to the closing balance of the previous month. You must perform this action until you get the full interest amount. To generate the EPF balance once the year ends, you will have to add the employees and employers contribution. This amount is then added to the sum of the interest accrued during the 12 months.You now have your PF balance for salaried employees.