How does an online FatakPay PF/EPF Calculator work?

Calculating your Employee Provident Fund (EPF) involves understanding the contributions made by both the employee and the employer, along with the applicable interest rate.

The formula shown in the image is the compound interest formula:

A = P × (1 + r/n)^(n·t)

Where :

A = the future value of the investment/loan, including interest

P = the principal investment amount

r = the annual interest rate (in decimal form)

n = the number of times interest is compounded per year

t = the number of years the money is invested or borrowed for

Components of EPF Calculation:

1. Employee Contribution : 12% of Basic Salary + Dearness Allowance (DA)

2. Employer Contribution:

• 8.33% of Basic + DA goes to Employee Pension Scheme (EPS) (up to ₹15,000 of basic salary)
• Remaining goes to EPF Account

3. Interest Rate :

• The EPF interest rate is declared annually by EPFO but is compounded monthly.
• Interest is calculated on the monthly closing balance and added to the account at the end of the financial year.

Components of PF Calculation:

1. Monthly Contribution:

• Total Contribution = Employee Contribution + Employer Contribution

2. Yearly EPF Accumulation:

• Yearly Contribution = Total Monthly Contribution × 12
• Add the annual interest to this amount.

3. Over the Years:

• Account for compounding interest and cumulative contributions over your employment duration.

Use a PF Calculator:

Instead of manual calculations, use an EPF Calculator to automate and simplify the process:

• Input your basic salary, employee contribution percentage, employer contribution percentage, and interest rate.
• Specify the number of years you plan to work.
• The calculator will provide your total corpus, including the contributions and accumulated interest.

• Future Value : The projected total value of your investment at the end of the tenure.
• Total Returns : The profit earned over the investment period.

Benefits of Using a FatakPay PF Calculator:

• Retirement Planning : Know your total savings at retirement.
• Loan Against PF : You can estimate the loan amount based on withdrawal rules. However, EPFO rules dictate eligibility, such as:
• - Marriage/Education: Know your total savings at retirement.
• - Home Loan Repayment: Up to 90% of the balance after 10 years.
• Tax Insights :
• - EPF contributions are tax-exempt under Section 80C.
• - Withdrawals before 5 years of continuous service attract tax deductions.
• Financial Planning : Plan additional investments or contributions to achieve your retirement goals effectively.