EPF in India 2026: Rate, Withdrawal Rules and UAN Explained

Most salaried Indians pay into EPF every month, have never checked the balance, do not know what EPS is, and have no idea when they can withdraw. For the average employee, the EPF corpus often becomes the largest single asset after the family home, and it is almost entirely ignored. Here is how it really works, with the EPF calculator to project your own number.

How EPF works

You contribute 12% of your basic salary plus dearness allowance each month, and your employer matches 12%. The twist is in the employer's share: 8.33% is diverted to the Employee Pension Scheme and only 3.67% lands in your EPF. So your EPF balance actually grows by about 15.67% of basic each month, plus the annual interest. Knowing this split explains why your passbook balance is smaller than you might expect from a 24% total contribution.

The interest rate for 2025-26

The EPF interest rate for FY 2025-26 is 8.25% per annum, holding steady from the previous year, a rate the EPFO declares each year. Interest is calculated on the monthly running balance and credited once a year at the close of the financial year. Compared with most safe instruments, 8.25% tax-free is a strong rate, which is part of what makes EPF such a quietly powerful wealth builder over a full career.

What the EPF Scheme 2026 actually changed

In the first week of July 2026 the government notified the EPF Scheme, 2026, which came into force on 29 June 2026 and replaces the seven-decade-old EPF Scheme of 1952. The whole framework now sits under the Code on Social Security, 2020, the law that folds India's older labour and social security rules into one code. If the headlines made you nervous about your balance, you can relax. This is a legal and administrative rebuild of the rulebook, not a change to what you pay in or what you earn.

Your 8.25% for FY 2025-26 is untouched. That is the third year running at 8.25%, after the rate was lifted from 8.15% in FY 2022-23 to 8.25% in FY 2023-24 and held there since, as the reported details of the new scheme confirm. The 12% employee share, the 12% employer share and the 8.33% slice that feeds EPS all continue exactly as before. Existing balances carry over with no action needed from you.

One operational change is worth knowing if your company runs its own PF trust. Many large employers are exempted establishments that manage an in-house provident fund instead of parking the money with EPFO. Under the new scheme these exempted trusts cannot declare an annual interest rate more than 200 basis points, meaning two percentage points, above the rate the central government declares for EPF. So in a year with an 8.25% government rate, an exempted trust is capped at 10.25%. The aim is to keep private-trust returns broadly in line with the official rate while still leaving room for strong investment performance.

The rest of the scheme leans hard into governance and digital process. Exempted trusts now face tighter rules on trustee eligibility, mandatory meetings, electronic accounting, annual audits and online disclosure. For EPFO itself, the shift is about faster, more automated administration of claims and transfers. None of this changes the shape of your account. It changes how the system behind it is run and supervised.

As an ordinary member, the practical answer is that nothing on your side needs to happen. Your UAN, your passbook, your monthly contributions and your annual interest all continue under the new rules. The people who feel this change are employers and trustees, not employees. Keep doing what already works: transfer your balance the day you switch jobs, and check it once or twice a year. The official notification confirms the core benefit structure stays as it was.

EPS, the pension you might not know about

The employer's 8.33% feeds the Employee Pension Scheme, which pays a monthly pension from age 58. The pension is based on your pensionable salary and years of service, but the pensionable salary is capped at ₹15,000, so most EPS pensions land in the range of a few thousand rupees a month. It is a useful floor, not a full retirement income, which is why pairing EPF with other investments matters.

How to check your EPF balance

There are several quick ways. Log in to the EPFO member portal with your UAN, the Universal Account Number that follows you across jobs. Use the UMANG app on your phone. Send an SMS to 7738299899 from your registered number, or give a missed call to 011-22901406. Checking once or twice a year helps you catch errors early, such as a previous employer not transferring your balance.

EPF withdrawal rules

Full withdrawal is allowed at retirement or after two months of unemployment, under the withdrawal rules the EPFO publishes. Partial withdrawals are permitted for specific reasons, including buying or building a home, medical emergencies, marriage and higher education, each with its own conditions and limits. On tax, withdrawals after five years of continuous service are tax-free; pulling money out before five years can make it taxable, so plan around that threshold.

VPF, the underrated top-up

If you want to save more at the same attractive rate, the Voluntary Provident Fund lets you contribute beyond the mandatory 12%, all the way up to 100% of your basic, earning the same 8.25%. For a conservative saver, VPF is one of the best low-risk options available, with the same EEE tax treatment as EPF for contributions up to the prescribed limits. Model how extra contributions grow in the EPF calculator.

EPF vs PPF vs NPS

EPF is automatic, safe and tax-free, but the employer's pension slice and the withdrawal rules make it less flexible than it looks. PPF offers a guaranteed 7.1% with full control at maturity, and NPS adds equity upside plus an extra tax deduction at the cost of a compulsory annuity. See the trade-offs in our EPF vs PPF and EPF vs NPS comparisons, and project PPF with the PPF calculator.

What happens to your EPF when you change jobs

Changing jobs is where EPF goes wrong for many people. The right move is to transfer your balance to your new employer using your UAN, which keeps the money compounding and preserves your continuous service for the five-year tax-free rule. The wrong move is withdrawing the balance each time you switch, which resets your service clock, can trigger tax, and quietly drains your largest retirement asset.

Because the UAN stays the same across employers, online transfer is usually a few clicks on the EPFO portal. Make it a habit on day one of a new job. Then project where the preserved balance lands by retirement with the EPF calculator, and you will see why keeping the chain unbroken matters so much.

⚠️Financial Disclaimer: This article is educational and not financial advice. The EPF rate is set annually and may change. Tax treatment depends on your service period. Verify with EPFO at epfindia.gov.in.