Demystifying Employee PF Contribution: A Comprehensive Guide to Building Your Retirement Fund

TrackMyPF by Finnable, Download for Smarter PF Management


Employee Provident Fund (EPF) contribution plays a pivotal role in the financial planning of every employee. It serves as a cornerstone of retirement savings, offering a reliable source of income after the conclusion of one’s career. Understanding the mechanics of EPF contribution is essential as it empowers individuals to make informed decisions regarding their financial future.

In this comprehensive guide, we will explore the intricacies of EPF contribution, shedding light on its rates, benefits, and the significant role it plays in building a secure retirement fund. By delving into these details, employees gain a deeper understanding of how their contributions accumulate over time, paving the way for a financially stable retirement.

EPF contribution rates dictate the percentage of an employee’s basic salary and dearness allowance that is allocated towards their EPF account. These contributions, made by both employees and employers, accumulate over the years, gradually building a substantial retirement corpus. Additionally, a portion of the employer’s contribution is directed towards the Employee Pension Scheme (EPS), ensuring a pension for employees post-retirement.

Understanding Employee PF Contribution:

Employee PF contribution is a mandatory savings scheme for employees in India, governed by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. Both employees and employers contribute a certain percentage of the employee’s basic salary and dearness allowance towards the EPF account.

EPF Contribution Rates:

The EPF contribution rate is currently set at 12% of the employee’s basic salary and dearness allowance. For example, if an employee’s basic salary is Rs. 20,000 per month, the EPF contribution will be Rs. 2,400 (12% of Rs. 20,000).

EPF Pension Contribution:

In addition to the EPF contribution, a portion of the employer’s contribution (8.33% of the employer’s contribution subject to a maximum of Rs. 1,250) is diverted towards the Employee Pension Scheme (EPS). This contribution ensures that employees receive a pension after retirement, providing financial security in their golden years.

Your Role in Building Your Retirement Fund:

As an employee, it’s essential to understand your role in building your retirement fund through EPF contribution. Here’s what you can do:

  1. Stay Informed: Familiarize yourself with the EPF contribution rates, rules, and benefits to make informed decisions about your savings.
  2. Regularly Monitor Contributions: Keep track of your EPF contributions through your monthly payslips or by accessing your EPF account online. Ensure that both you and your employer are contributing the correct amounts.
  3. Opt for Voluntary Contributions: In addition to the mandatory EPF contribution, consider making voluntary contributions towards your EPF account to accelerate your retirement savings.
  4. Plan for the Future: Utilize EPF calculators to estimate your future retirement corpus based on your current contributions. This will help you set realistic financial goals and plan for a comfortable retirement.
  5. Review Investment Options: Periodically review the investment options available under the EPF scheme and consider diversifying your retirement portfolio to maximize returns.

TrackMyPF app by Finnable:

Finnable’s TrackMyPF app offers a convenient solution for monitoring EPF contributions. Through this application, users can easily access a range of features, including real-time tracking of their present PF balance, viewing previous PF transactions, estimating potential withdrawal amounts, understanding the withdrawal process, and even forecasting the future growth of their PF balance.

Benefits of Employee PF Contribution:

Employee PF contribution offers several benefits, including:

  1. Retirement Savings: EPF contributions serve as a long-term savings tool, ensuring financial security during retirement.
  2. Tax Benefits: EPF contributions are eligible for tax deductions under Section 80C of the Income Tax Act, reducing your taxable income and overall tax liability.
  3. Employer Matching: Many employers match a portion of the employee’s EPF contribution, effectively doubling the savings towards retirement.
  4. Withdrawal Flexibility: EPF contributions can be partially withdrawn for specific purposes such as purchasing a house, medical emergencies, or education expenses, providing liquidity when needed.


Understanding your role in employee PF contribution is vital for building a secure retirement fund. By staying informed, monitoring contributions, and planning for the future, you can ensure a financially stable retirement. Take advantage of the benefits offered by EPF contributions to embark on your journey towards a prosperous retirement.

The benefits of EPF contribution extend beyond retirement security. EPF contributions are eligible for tax deductions under Section 80C of the Income Tax Act, providing individuals with additional financial incentives. Furthermore, EPF contributions offer a sense of financial discipline, encouraging individuals to save consistently towards their retirement goals.

Your role in building a secure retirement fund through EPF contribution is significant. By staying informed about contribution rates, understanding the benefits, and monitoring your EPF account regularly, you take proactive steps towards securing your financial future. Additionally, exploring investment options within the EPF scheme allows you to optimize your savings and maximize returns over time.

In essence, EPF contribution is more than just a mandatory savings scheme, it is a pathway to financial security and mental peace during retirement. By grasping its intricacies and actively participating in the process, individuals can pave the way for a comfortable and fulfilling retirement journey.


Frequently Asked Questions (FAQs):

Finnable has set a required minimum age for personal loan of 21 years for individuals to be eligible for a personal loan. This ensures that applicants have reached legal adulthood and are capable of entering into a financial agreement.

Yes, Finnable understands the financial needs of young borrowers and offers personalised loan options tailored to their specific requirements. Whether it's financing higher education, purchasing essential items, or starting a business venture, Finnable provides support to young individuals seeking financial assistance.

Borrowers nearing retirement may have unique financial needs, such as retirement planning, medical expenses, or supporting their children's education. Finnable offers personalised loan solutions that consider the specific circumstances of pre-retirement individuals, helping them meet their financial goals.

Unfortunately, no. Finnable does not, at the moment, offer any loans to senior citizens. Currently, 60 is the maximum age for personal loans set by Finnable

Other than personal loan age limits, Finnable considers various other factors for determining loan eligibility. These factors may include the applicant's income, credit score, repayment capacity, and employment stability. By assessing these aspects comprehensively, Finnable ensures that borrowers across different age groups can access the loan products that best suit their financial needs. 


Amit Arora

I am a seasoned retail banker with over 21 years of global experience across business, risk and digital. In my last assignment as Global Head Digital Capabilities, I drove the largest change initiative in the bank to deliver the end-to-end digital program with over US$1 billion in planned investment. Prior to that, as COO for Group Retail Products & Digital, I implemented a risk management framework for retail banking across the group.
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