Provident Fund

What is the Basic Formula for Calculating EPF Online?

Computing your annual EPF returns has become relatively easy these days with an online EPF calculator. Have a look at the detailed process mentioned below.

An online EPF calculator is a popular tool that can seamlessly compute your annual EPF estimates in no time. With the whole process of digitalisation of the country, the Government is also aiming to shift people’s perspectives online. In this scenario, using an EPF calculator is a great idea. It will help you calculate your contributions and add the total with the required interest rates. So please eliminate your stress of computing EPF on paper, and start saving it online. In this blog we will discuss about the formula of EPF, Steps To Follow For Online EPF Calculation, Advantages of EPF Calculator.

What is the formula of EPF? ?

To calculate your monthly or annual PF Interest Calculator, you must organise valid documents to provide all necessary information. You need to give details like your current age, retirement age, monthly salary (basic pay+DA), and interest rates. It would be best if you also produced your employer’s contribution towards your EPF to complete the process.

EPF returns are just the overall estimates of three vital points:

  1. Employee’s contribution to EPF
  2. Employer’s contribution to EPF
  3. Interest rate (fixed by the Government)

However, there are some rules that you need to know while computing your annual EPF using an online EPF calculator. They are as follows:

  • If your monthly gross salary is less than or equal to ₹15,000, your employer will contribute 3.67% of the salary amount for EPF. The rest, 8.33%, goes towards the Employee’s Pension Scheme (EPS).
  • If your monthly salary exceeds ₹15,000, your employer’s contribution will equal the difference between the employee’s contribution to EPF and the employer’s contribution to EPS. 
  • The interest rate for FY 22-23 is fixed at 8.10% by the Government. It is subject to frequent changes, so keep an eye on the current rates.
  • An employee’s contribution is 12% of the total monthly salary.

Therefore, you must be very careful while filling in the details online. If you miss out on any vital point, it can lead to massive changes in your EPF calculation with Formula of EPF, and the whole process can go wrong. 

Steps To Follow For Online EPF Calculation

You must follow specific steps to ensure that the online process for EPF calculation is accurate. However, they are simple and easy to follow; once you understand them, nothing can go wrong.

Here are the steps in detail:

  • Mention your personal details like name, current age, and retirement age as per the Formula of EPF.
  • Add your monthly salary. It should include both basic pay and Dearness Allowance (DA). It would be best if you also mentioned the expected annual increment in your salary as per Formula of EPF.
  • Fill in the details of contributions made by the employer and employee. Make sure you get it right because the whole calculation can go wrong if you exchange the values. Keep in mind that the percentage of contributions needs to be computed separately.
  • Add the interest rate as fixed by the Government. As of now, it is 8.10%. As interest rate is also a part of Formula of EPF.

While you fill in the details, there are certain things to remember. Firstly, you must go through the online process over and over again. Try a sample first, if necessary. Secondly, you need to ensure that there is no error in the details mentioned by you. In case of a minor issue, your entire process can go wrong. So check and re-check to be sure. Lastly, you must know that you can keep the record as a draft stored in the EPF calculator online. In case you miss out on any valid documents, you can always come back to editing. Make sure that you do not hurry. It is always better to complete the whole process in fragments and then check it in detail.

Advantages Of Using An Online EPF Calculator

Many people argue why online EPF calculations are not trustworthy or valid. Instead, they prefer the pen-and-paper method. However, these myths take away your capability to reduce the workload. Once you use an online EPF calculator, you will realise the difference. It not only reduces the load but also provides numerous features to save, store, and extract your documents as and when required. Here are some of the benefits to look at:

  • It is easy to use and takes much less time. An online EPF calculator has inbuilt features that cover up the details automatically. You need to present your customised details to complete the process.
  • The entire process is accurate. It will seamlessly bring out the EPF estimates once you fill in all the details. You can eliminate the unnecessary trouble of formally documenting everything on paper.
  • The EPF calculators are trustworthy. You will be able to save your documents without any risk of exposure. On the other hand, paperwork often leads to trouble if it falls into the wrong hands. The encrypted features make the applications much more secure to enter all details.
  • You can plan out your investments shortly by knowing the EPF estimates online. It will give you a clear idea about your liabilities and thus help you make crucial decisions.
  • You can also plan out your retirement in a better way. For example, an EPF estimate will help you know where you stand after retirement. Technically, you will get to know every other detail of your EPF returns once you fill in all the details. Therefore, you will get the best retirement plan once you manipulate your EPF estimates properly.
  • If you are eager for a promotion or hike in your salary, you can work on it using your EPF calculations. The value you get for a month will add up uniformly in a year, and so forth. You can quickly bring up new plans to increase the rates and values of your contributions.

Conclusion – Plan For Your Future With The Best EPF Calculator Online

As stated above, you will get to know every detail of your EPF returns once you start calculating from bits and pieces. The online EPF calculators make the process easier with all the complex calculations done in no time. Plan your pre and post-retirement life strategically by looking at your EPF estimates. If you cannot make ends meet, you can always consult Vakilsearch. The experts will help you get rid of technical problems easily. Calculate your EPF returns online with the best applications and save your data for the future.

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