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PF means a contribution both an employer and employee make toward the future benefits and added financial advantage to both you personally and your family.it has been designed to safeguard peoples retirement period so that they can live comfortably and stress free.an employees is required to make 12% monthly salary contribution to the fund. It is mandatory for every organization that has hired more than 20 employees to partake in this practice.
The fund is found under the umbrella of provident fund and provisions act, 1952 and is managed and handled by the providentfund institute. It is a statutory body of the government of India.
This one of the best investment tool an employee can decide to undertake. Both the private and public sector workers are to per take in the exercise. It allows you as an employer and employee to save up money which will be earning a compound interest yearly and will be given to you tax free.
Definition of a PF calculator
This is a tool provided online allowing a person to adequately calculate the EPF interest on your account. The central government is the one that acts like a bank give you the added interest on you saved up amount. This tool can be simply defined as an investment tool that assists you in investment assessment in the provident fund system.
The PF calculator will be of much help to you not only in knowing your earned interest but will also be able to give an estimate balance of your account when you retire. Therefore, you are able to know the amount of money you expect in the future.
There are several key information you are required to key in the calculator.an employee should give out the following details so as to know the provident fund interest.
- The current employees age
- EPF balance .the information should be based on current details
- Monthly basic salary
- Dearness allowances[monthly]
- Expected salary raise
- Monthly percentage contribution to the fund.
Once you have keyed in the information onto the calculator, it will give you the total amount of interest you ae expected to receive at retirement time. The EPF calculations have been made much easier buy the use of the calculator.
The interest rate on the provident fund
Before calculating the interest rate.an employee should have the knowledge of the below issues
- The central government allows gives out the rate of EPF interest. Theinterest notice is obtainable at the official EPFO website and each financial year has its stated interest.
- Based on the employees’ average monthly balance, the EPF is then calculated. The provident fund contributors are to obtain interest on their contribution and even employers contribution to the same course.
- Although the interest is to be calculated monthly, the total amount of earn interest is to be credited yearly
- Credit payout is to be handled at the month of march towards the end
- The accounting year is to commerce in February.