PF Calculation Formula: Interest in the EPFO is calculated on a monthly basis, but it is deposited into the PF account at the end of the year. Once the interest is credited to the PF account, it becomes the principal.
Add informalnewz.com as a Preferred Source
Employed individuals are always focused on a decision by the Employees’ Provident Fund Organization (EPFO): how much interest the government will pay on their PF accounts. Meanwhile, for the current fiscal year 2025-26, the government has not reduced the existing interest rate, maintaining it at 8.25%.
There are over 60 million EPFO subscribers in the country. But do you know how much the government will deposit in your PF account as interest? You can calculate it very easily.
In fact, if you have ₹1 lakh, ₹5 lakh, or ₹10 lakh in your EPFO account, let’s calculate how much interest you are entitled to. Interest in the EPFO is calculated monthly, but it is deposited in the PF account at the end of the year. Once the interest is deposited in the PF account, it becomes the principal amount, and interest is also earned the following year. The higher the balance in the PF account and the longer the tenure, the greater the benefit. For this reason, PF is considered a safe and strong long-term savings.
8.25% interest announced on PF
If someone has Rs 1 lakh in their PF account as of March 31, 2026, they will receive Rs 8,250 in interest at an 8.25% interest rate. This means that on April 1, 2026, the total amount in their PF account will increase to Rs 1,08,250. Interest will again accrue on this amount in the next financial year, meaning the customer benefits from compound interest.
On the other hand, if they have Rs 5 lakh deposited in their PF account, they will receive an additional Rs 41,250 at an annual interest rate of 8.25%. This means they will earn approximately Rs 41,250 in interest annually. However, it is important to note that the EPFO calculates interest on the monthly running balance. Therefore, if you withdraw or deposit money mid-year, the interest will change accordingly.
How much interest will be earned on an amount of Rs 10 lakh?
If someone has ₹10 lakh deposited in their PF account as of March 31, 2026, the interest on the deposit will be ₹82,500 at the current 8.25% annual interest rate. This means that the balance in the PF account will increase to ₹10,82,500 from April 1 of the next financial year. Interest will be paid on this increased amount next year. However, if the annual employee contribution exceeds ₹2.5 lakh, the interest earned on the excess amount may be taxable.
