How to calculate PF in India, with examples
PF is 12% of an employee’s basic pay plus DA, deducted every month, with a matching 12% from the employer. Most companies calculate it on a maximum wage of ₹15,000, so the employee’s share is capped at ₹1,800 a month. The employer’s 12% is split: 8.33% to the pension scheme (EPS) and the rest to the provident fund (EPF).
The rules in one table
| Part | Rate | On what |
|---|---|---|
| Employee PF | 12% | Basic + DA (capped at ₹15,000 if the ceiling applies) |
| Employer EPS | 8.33% | Basic + DA up to ₹15,000, so at most ₹1,250 |
| Employer EPF | 12% minus EPS | The rest of the employer’s 12% |
Example 1: basic pay of ₹11,000
- Employee PF: 12% × ₹11,000 = ₹1,320
- Employer EPS: 8.33% × ₹11,000 = ₹916
- Employer EPF: ₹1,320 − ₹916 = ₹404
Example 2: basic pay of ₹25,000, with the ceiling
- PF wage: capped at ₹15,000
- Employee PF: 12% × ₹15,000 = ₹1,800
- Employer EPS: 8.33% × ₹15,000 = ₹1,250
- Employer EPF: ₹1,800 − ₹1,250 = ₹550
Other employer charges
Employers also pay EDLI insurance and PF admin charges on top of their 12%. These are small, but your payroll should include them in the cost of each employee.
Common mistakes
- Calculating PF on gross pay instead of basic plus DA.
- Applying the ₹15,000 ceiling to EPS but forgetting it for PF, or the other way round.
- Missing PF for days with loss of pay, which changes the basic for that month.
Check any salary with the free PF and ESI calculator, or let Crew payroll do it on every run.
This is general information, not legal or tax advice. Rules can change; confirm current rates with EPFO.
Frequently asked questions
Is PF calculated on gross or basic salary?
On basic pay plus DA, not gross pay.
What is the PF wage ceiling?
₹15,000 a month. Contributions above it are optional for employer and employee.
How much goes to the pension scheme?
8.33% of basic pay up to ₹15,000, so at most ₹1,250 a month, from the employer’s share.
