Employees' Provident Fund Organisation (EPFO): notes for bank exams

At a glance

The EPFO runs compulsory retirement savings for employees of covered establishments. Employer and employee each pay a share of wages into the Employees' Provident Fund, part of the employer's share funds a pension (EPS) and the employer also pays for a small life cover (EDLI). Each year the EPFO's board recommends the interest rate credited to members.

Key facts

Ministry: Ministry of Labour and Employment
HQ: Bhavishya Nidhi Bhawan, New Delhi
Original law: Employees' Provident Funds and Miscellaneous Provisions Act, 1952
Current law: Code on Social Security, 2020 (its provident-fund provisions in force from 21 November 2025); new EPF Scheme, 2026 notified on 29 June 2026, replacing the EPF Scheme, 1952
Apex body: Central Board of Trustees (CBT), tripartite (government, employers, employees), chaired by the Union Labour Minister (Mansukh Mandaviya)
Chief executive: Central Provident Fund Commissioner (Ramesh Krishnamurthi), also Member Secretary of the CBT
Three schemes: EPF (1952), EDLI (1976), EPS (1995)
Contributions: 12% of basic wage plus DA from employee and 12% from employer; of the employer's share, 8.33% (on wages up to ₹15,000) goes to EPS
Wage ceiling: ₹15,000 a month
EDLI: maximum assurance ₹7 lakh, minimum ₹2.5 lakh
EPF interest rate: 8.25% for 2023-24, 2024-25 and 2025-26
Members: about 30 crore accounts; about 7 crore contributing subscribers

How it works

EPF. Both shares (minus the EPS part) accumulate in the member's account with interest and are paid on retirement or allowed as partial withdrawals for set purposes. A Universal Account Number (UAN) keeps one account across jobs.

EPS, 1995. Funded by 8.33% of the employer's contribution plus a small government subsidy. It pays a monthly pension after ten years of service, with a minimum of ₹1,000 a month.

EDLI, 1976. A life cover paid by the employer alone (0.5% of wages up to the ceiling); the nominee receives a lump sum if the member dies in service.

Interest rate process. The CBT recommends the rate based on the year's income; the Finance Ministry must concur before it is credited.

Year	EPF rate
2019-20	8.50%
2020-21	8.50%
2021-22	8.10% (lowest since 1977-78)
2022-23	8.15%
2023-24	8.25%
2024-25	8.25%
2025-26	8.25%

Timeline

1952: EPF Act; EPFO set up
1976: EDLI scheme
1995: EPS replaces the 1971 Family Pension Scheme
2014: Wage ceiling raised from ₹6,500 to ₹15,000; UAN launched
2025: Code on Social Security, 2020 brought into force (21 November)
2026: CBT keeps 8.25% for 2025-26 (2 March); EPF Scheme, 2026 notified (29 June)

Recent developments

26 Oct 2026: EPFO is weighing an Interest Stabilisation Reserve of about ₹25,000 crore, proposed in an IIM Kozhikode study, to keep credited interest steady when bonds default; no decision yet.
29 Jun 2026: New EPF Scheme, 2026 notified under the Code on Social Security, 2020.
2 Mar 2026: CBT (239th meeting) recommended 8.25% for 2025-26.

Exam traps

EPFO is under the Labour Ministry, not Finance; the PFRDA regulates the NPS, not the EPF.
The CBT is chaired by the Labour Minister; the CPFC is its Member Secretary.
The 8.33% for EPS comes out of the employer's 12%, not the employee's.
EDLI is paid only by the employer; the employee contributes nothing to it.
ESIC (health insurance) is a separate body under the ESI Act, 1948.

Quick check

Q: Which body recommends the EPF interest rate? A: The Central Board of Trustees (CBT).
Q: What was the EPF interest rate for 2025-26? A: 8.25%.
Q: What is the maximum EDLI benefit? A: ₹7 lakh.

Employees' Provident Fund Organisation (EPFO)