Employees’ Provident Fund (EPF) is a retirement savings plan established by the Employees’ Provident Fund and Miscellaneous Act, 1952. The Central Board of Trustees, which is made up of members from the government, employers, and workers, administers and manages the programme. This board’s operations are aided by the Employees’ Provident Fund Organization (EPFO). EPFO is controlled by the Ministry of Labour and Employment and falls under the direct control of the government.

The EPF scheme, of course, seeks to encourage workers all over the world to save for their retirement. Employees’ Provident Fund, or EPF, is a monthly pool of funds donated by both the employer and the employee. Both the employer and the employee contribute to the EPF 12 per cent of the employee’s salary (basic + dearness allowance). The Employees’ Provident Fund sets a fixed rate of interest on all types of contributions made by both the employee and the employer. The amount of interest that will be paid on the loan, as well as the overall accrued amount, is completely tax-free, which means that the employee will withdraw the whole fund without paying any taxes.

The accrued balance may also be withheld by the employee’s nominee or legal successor after his death, or by the employee himself after his resignation.

Employees’ Provident Fund (EPF) Schemes:

     1.EPF Scheme, 1952

  • Accumulation plus interest upon retirement and death.
  • Partial withdrawal allowed for education, house construction, illness and marriage.
  • Housing scheme for EPFO members to achieve Hon’ble Prime Minister’s vision of housing all Indians by 2022.

     2.Employees’ Pension Scheme (EPS), 1995

  • The monthly benefit for superannuation/ retirement, disability, survivor, widow(er) and children.
  • Minimum pension on disability.
  • Past service benefit to participants of the former family pension scheme, 1971.

     3.Insurance Scheme (EDLI), 1976

  • The benefit provided in case of the death of an employee who was a member of the scheme at the time of death.
  • Benefit around 20 times of wages. Maximum benefit of Rs 6 lakhs.


Employees’ Provident Fund is one of the largest and most well-known savings plans offered to Indian workers. The following are some of the scheme’s major benefits:

  • Tax-Free Savings,
  • Long-Term Financial Security,
  • Retirement Period,
  • Unseen circumstances,
  • Unemployment/Income Loss,
  • Resignation/Quitting of Job,
  • Death,
  • Disability of the employee,
  • Lay-off,
  • Long run savings,
  • Liquidity of funds,
  • Pension Scheme,
  • Insurance Scheme,
  • Accessible All Over.


  • Employees need to become active member of the scheme in order to avail benefits under it.
  • Employees of an organization are directly eligible for availing Provident Fund, insurance benefits as well as pension benefits since the day they join the organization.
  • Any organization employing a minimum of 20 workers is liable to give EPF benefits to the workers.
  • This scheme does not cater to the needs of people residing in Jammu and Kashmir.


Both the employer and the employee contribute a portion of their salaries to the Employees’ Provident Fund. These monthly donations are made on a regular basis. The interest rate is determined by the employee’s basic pay as well as the salary’s dearness allowance.

In general, the employee contribution rate is set at 12 per cent. The following organisations, however, have a fixed rate of ten per cent:

  • Organizations or firms employing a maximum of 19 workers.
  • Industries declared as sick industries by the BIFR.
  • Organizations suffering an annual loss much more as compared to their net value.
  • Coir, guar gum, beedi, brick and jute industries.
  • Organizations operating under a wage limit of ₹ 6,500.


The minimum amount of contribution that the employer must make is set at 12 per cent of $15,000 per employee (although they can voluntarily contribute more). This is the equivalent of $1800 a month. This means that both the employer and the employee would contribute a total of 1800 per month to the scheme. Initially, this number was set at 12 per cent of $6,500, resulting in a contribution of $780 from both the employer and the employee.