Employee Provident Fund (EPF)
Retirement savings deducted from your salary.
What does it mean? (Simple)
EPF is a mandatory retirement savings scheme for salaried employees in India. Every month, 12% of your basic salary is deducted and deposited into your EPF account. Your employer also contributes an equal amount.
The money earns interest (around 8%) and is meant for retirement. You can withdraw it when you leave a job or retire.
EPF is one of the best retirement tools because of the employer contribution and decent interest rate.
Example with ₹ numbers
If your basic salary is ₹30,000, ₹3,600 goes to EPF from you and ₹3,600 from your employer every month (₹7,200 total).
Common mistakes to avoid
- ⚠️Withdrawing EPF when switching jobs (better to transfer)
- ⚠️Not linking Aadhaar to EPF account
Related terms
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⚠️ Educational only: This explanation is for learning purposes. Please consult a financial advisor for personalized advice.