Free PF Calculator for Delhi NCR

How PF is Calculated in India — Complete Guide

What is EPF (Employee Provident Fund)?

The Employee Provident Fund is a government-backed retirement savings scheme managed by the Employees' Provident Fund Organisation (EPFO). Under the EPF & Miscellaneous Provisions Act, 1952, both employer and employee contribute a fixed percentage of the employee's Basic Salary plus Dearness Allowance to a PF account every month. The accumulated corpus, along with interest, is available to the employee at retirement or under specific withdrawal conditions.

EPF is one of the most popular long-term savings instruments in India, offering a government-guaranteed interest rate (currently 8.25% p.a.) that is higher than most fixed deposits and small savings schemes. For salaried employees in Delhi NCR, PF is typically the single largest component of retirement savings.

EPF vs EPS vs EDLI — What's the Difference?

PF Contribution Breakdown Formula

Here is exactly how PF contributions are calculated each month:

1. PF Wage = Basic Salary + Dearness Allowance (DA)
2. Employee PF = 12% of PF Wage (goes entirely to EPF account)
3. Employer PF = 12% of PF Wage, split as:
   • EPS (Pension): 8.33% of PF Wage, maximum on ₹15,000 base = max ₹1,250/month
   • EPF (Employer share): Employer PF minus EPS amount
4. Admin Charges = 0.50% of PF Wage (paid by employer, not deducted from employee)
5. EDLI = 0.50% of PF Wage, maximum on ₹15,000 base (paid by employer)

For example, on a Basic Salary of ₹25,000/month with zero DA: Employee PF = ₹3,000, Employer EPS = ₹1,250 (capped), Employer EPF = ₹3,000 - ₹1,250 = ₹1,750. Total going into the EPF account = ₹3,000 + ₹1,750 = ₹4,750/month.

PF Wage Ceiling of ₹15,000 Explained

The statutory PF wage ceiling is ₹15,000 per month. This means:

• If Basic + DA is ₹15,000 or below, PF is calculated on actual Basic + DA. Enrollment is mandatory.
• If Basic + DA exceeds ₹15,000, the minimum mandatory PF is calculated on ₹15,000 only. However, employer and employee can mutually agree to contribute on the full Basic + DA.
• EPS (pension) contribution is always calculated on a maximum of ₹15,000 regardless of actual salary.

Many companies in Delhi NCR, especially large IT firms and MNCs, contribute PF on the full Basic Salary rather than just ₹15,000. This increases the employer cost but also builds a larger retirement corpus for the employee. You can use the toggle in our calculator above to compare both scenarios.

When Does PF Apply?

PF is mandatory under these conditions:

• Establishments with 20 or more employees must register with EPFO
• Employees drawing Basic + DA of ₹15,000 or less per month must be enrolled
• Employees earning above ₹15,000 can join voluntarily with employer agreement
• Once enrolled, PF continues even if salary rises above ₹15,000
• Establishments with fewer than 20 employees can opt for a 10% contribution rate

For more on how PF interacts with your overall salary structure, see our CTC to In-Hand Salary Calculator. To understand Professional Tax deductions in Delhi NCR, visit our Professional Tax in Delhi guide. For minimum wage compliance, check our Minimum Wages in Delhi page.

Employers looking to automate PF calculations and filing can explore our Payroll Software which handles EPF, EPS, EDLI, and ECR filing automatically.