Payroll Program: Effective way to grow and transfer PF from your old company

The Provident Fund (PF) is the authority for working so hard for years. It helps you to stay secure about your future and gives a sense of financial independence after retirement.

However, it becomes problematic when you don’t transfer the PF to the current company. Using a payroll program, you can easily transfer the PF.

How to shift PF to your current company?

Here is the step-by-step guide on EPF and how to shift PF to your current company.

Identify the EPF monthly contributions

Based on the Employee Provident Fund (EPF) scheme, you can contribute 12% of the income every month. Many payroll programs have detailed descriptions of the EPF.

Sometimes, for certain employees, this can account for 10%.

To decipher this exactly, you can check for the following conditions

  1. A company having less than 20 employees.
  2. Businesses that are small scale and not mainstream like brick, coir, jute, or beedi.
  3. Companies that face severe loss -more than their net worth.

Special considerations are given to firms employing women where the contribution is only 8%.

Having a basic idea of these terms will let you know your monthly contributions to the EPF. Don’t miss checking the Self-employed check stub.

Calculate the EPF interest

EPF interest is calculated monthly but only withdrawn from the employees’ accounts. This rate of interest is reviewed every year. For the 2020-2021 financial year, it is 7.1%.

How to calculate the EPF interest?

Employee Provident Fund Organization (EPFO) has provided two methods to calculate the EPF interest.

#1. Step method Since the opening balance is nil, the interest for the first month is zero.

For example, when your salary and allowance is Rs. 40,000 and your contribution to EPF is 12%, which equals Rs.4800.

Let’s assume your employer contributes 8.33% of Rs 15000 ( your employer can choose to restrict Rs 15000 per annum); then, you need to subtract Rs 1249.5 from Rs 4800 = Rs. 3550.5

This indicates your second-month balance as Rs 4800+ Rs 3550.5 = Rs. 8350.5

For 7.1% per annum, your monthly interest will be 7.1%/ 12 = 0.59%.

Finally, your interest will be 0.59%* 8350.5 =Rs. 49.26, which is Rs 50 after round off.

#2. Formula method For the EPF balance Rs. 8350.5 and the rate of interest 7.1%, you can from the formula as

(Rate of interest/ number of months in a year) * EPF balance

=(7.1%/ 12)* Rs. 8350.5= Rs 50.

Understand the tax benefits

No tax is included for the amount you like to contribute to the EPF.

However, this is not applicable if you withdraw the EPF before five years.

This is why you should carry forward the same PF account when you shift to another company.

Withdrawal of VPF

You can reap the benefits of the EPF completely after you turn age 58 because the PF you have contributed to the account every month will attain maturity and grow into a large corpus.

You can also make partial withdrawals from your account during emergencies like housing loans, higher education, and marriage.

You can go for Voluntary Provident Fund (VPF) in these cases, where you can make more than 12% contributions. It is a safe option as it gives you the freedom even to make complete withdrawals.

Connect UAN to EPF scheme

Having Universal Account Number (UAN) can let you transfer the PF when shifting to another company.

It is the 12-digit number given by EPFO. Irrespective of how many times you change the job, the EPF benefits will still be the same and continue to grow.

To transfer the PF, you can log in to the EPFO website using the UAN based login ID given to you.

You can give the verification details like Aadhar card, PAN card, or driving license on the website. Next, you can check for the PF transfer form to update your current PF details.


By following these steps, you can set up an EPF account and change the PF account when you shift to another company.

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