What PF means
PF, or EPF, is the Employees’ Provident Fund: a retirement savings account for salaried workers, run by EPFO (the Employees’ Provident Fund Organisation). Each month, 12% of your basic pay (plus DA, the dearness allowance, if you get one) is cut from your salary. Your employer adds a matching 12%.
People say “PF” and “EPF” for the same thing. The money builds up with interest and is meant for later life, although some withdrawals are allowed earlier.
Where Sanjay’s 24% goes
Sanjay, 24, has basic pay of ₹20,000 a month and no DA. He is a made-up example.
| Per month | ₹ | Where it goes |
|---|---|---|
| Sanjay’s share (12%) | 2,400 | His EPF account |
| Employer share, EPF part (3.67%) | 734 | His EPF account |
| Employer share, pension part (8.33%) | 1,666 | Employees’ Pension Scheme (EPS) |
| Total | 4,800 |
So the employer’s 12% is split. Most of it goes to EPS, a pension fund, and only 3.67% reaches the EPF balance. Over a year, ₹37,608 goes into Sanjay’s EPF account (₹28,800 from him and ₹8,808 from his employer). Another ₹19,992 goes to EPS.
His employer also pays two small charges on top: 0.5% for EDLI (Employees’ Deposit Linked Insurance, a life cover linked to PF) and 0.5% as an admin charge. Here that is ₹100 each a month. Many offer letters count the employer’s PF inside CTC (cost to company), so this money is part of your package even though you never see it in cash.
EPFO declared interest of 8.25% for FY 2025–26. The rate is decided each year, so treat it as a past figure, not a promise.
The wage ceiling
PF rules use a wage ceiling: a pay level up to which PF is compulsory. From 17 September 2026, it was raised from ₹15,000 to ₹25,000 a month, and the pension part is capped at 8.33% of ₹25,000. We are still verifying this change against the official notice. If your basic pay is above the ceiling, ask HR whether PF is worked out on your full basic or on the ceiling. The answer changes your take-home.
The new Labour Codes (in force since 21 November 2025) matter too. If allowances are more than 50% of your pay, part of them is added back to “wages” for PF. That can raise your PF and lower your take-home.
Where you see PF
- Your payslip, as “PF” or “EPF” in the deductions. The employer share is often not shown there.
- Your offer letter or CTC breakup, as “employer PF contribution”.
- Your PF passbook on the EPFO member portal, which you open with your UAN (Universal Account Number, your PF number for life). It lists each month’s money and the interest.
What PF is not
PF is not the same as PPF (Public Provident Fund). PPF is a separate government savings scheme you open yourself, and our PPF calculator covers it.
PF is also not lost money. It is still yours, just not spendable this month. Plan your budget on take-home pay.
And don’t close PF every time you change jobs. Transferring it keeps your service unbroken and the money growing. Rules on withdrawals changed in 2026. Our guide Withdrawing your PF covers the limits, the waiting periods and the tax.
What to check
- Log in with your UAN and check that every month’s money has arrived.
- Compare the passbook with the PF line on your payslips.
- Make sure your Aadhaar, PAN and bank account are linked to your UAN.
To see how PF changes your take-home, try the Salary calculator. Your numbers stay on your device.