EPF Calculations: How Rs 15,000 Basic Salary Builds Rs 1 Crore Retirement Corpus The Employees' Provident Fund (EPF) is a retirement savings scheme where both employees and employers contribute monthly. Through disciplined investing, salary growth, and compounding, even a modest basic salary can grow into a substantial corpus. This article explains how a starting basic salary of Rs 15,000 can lead to a retirement corpus of approximately Rs 1 crore, based on standard assumptions and contribution structures. EPF currently offers an annual interest rate of 8.25 percent, compounded yearly. This compounding effect becomes increasingly significant over time, particularly in the later years of investment when the accumulated balance generates higher returns. The interest rate is a critical factor in the growth of the corpus, as it ensures that not only the contributions but also the accumulated interest earn returns. The contribution structure under EPF involves both the employee and employer. For a basic salary of Rs 15,000, the employee contributes 12 percent, which amounts to Rs 1,800 per month. The employer also contributes 12 percent, or Rs 1,800 monthly. However, the employer’s contribution is split between EPF and the Employees’ Pension Scheme (EPS). Out of the employer’s Rs 1,800, Rs 550 is allocated to EPF, while Rs 1,250 goes to EPS. This means the effective monthly EPF investment is Rs 2,350, or Rs 28,200 annually. EPF allows full withdrawal at retirement, with partial withdrawals permitted for specific needs such as medical emergencies, home purchases, education, or unemployment, subject to certain conditions. These rules ensure liquidity while maintaining long-term savings discipline.#employees_provident_fund #universal_account_number #employees_pension_scheme #epf_interest_rate #tax_benefits
