With new updates coming under EPFO 3.0, such as PF withdrawals through UPI, the upcoming ATM facility, higher auto-claim settlement limits, and simplified withdrawal rules, accessing provident fund savings is becoming easier than before. With these changes comes another important question: Which EPF component can you actually withdraw—employee contribution, employer contribution, or pension contribution? How much can you withdraw, and under what circumstances?

In this article, we explain the employee share, employer share, and pension contribution, along with the latest EPFO withdrawal rules that apply to each component.

How Is Your EPF Contribution Split?

Every month, both the employee and the employer contribute 12% of the employee's Basic Salary and Dearness Allowance (DA) towards EPF. However, the employer's entire contribution is not credited to the EPF account.

The Monthly EPF Contribution is Split as Follows:

• The employee's entire 12% share is credited to the EPF account and earns EPF interest every year
• A part of the employer's share (8.33%, capped at ₹1,250 per month) is credited to the Employees' Pension Scheme (EPS) to provide pension benefits after retirement
• The remaining employer share is credited to the EPF account and earns EPF interest along with the employee's contribution

Example: How the Employer's EPF Share Changes with Salary

*Assuming EPF contributions are calculated on the actual basic salary.

As the basic salary increases, the employer's share to EPS remains capped at ₹1,250 per month, while the remaining employer share is credited to the EPF account.

Which EPF Amount Can You Withdraw?

An EPF withdrawal generally includes both the employee share and employer share in the EPF account. In other words, when you withdraw your EPF savings, the total EPF balance is considered rather than the employee's or employer's share separately.

The difference lies in how much you can withdraw, which mainly depends on the purpose of the withdrawal and your employment status at the time of making the claim.

For Example:

• The withdrawal limits for medical treatment, housing, unemployment, and retirement are different
• The amount you can withdraw while you are employed may not be the same as what you can withdraw after becoming unemployed or after retirement

The Employees' Pension Scheme (EPS) contribution follows separate withdrawal and pension rules.

How Much Can You Withdraw from Your EPF Balance?

The amount you can withdraw from your EPF account depends on the purpose of the withdrawal and your employment status.

• For most eligible purposes, you can withdraw up to 75% of the eligible EPF amount under the latest EPFO 3.0 reforms
• 100% of the EPF balance can be withdrawn in eligible final settlement cases such as retirement, permanent disability, voluntary retirement, permanently leaving India, unemployment (after the applicable waiting period), and other approved situations
• Under the earlier EPFO framework, the waiting period for full withdrawal after unemployment was two months. Under the latest EPFO reforms, this waiting period has been proposed to be extended to 12 months

Disclaimer: Please refer to the latest EPFO guidelines, especially those relating to unemployment waiting period rules, applicable at the time of making your withdrawal claim.

What Happens to Your EPS (Pension) Contribution?

The Employees' Pension Scheme (EPS) follows different rules from the EPF account.

Below are a Few Important Points to Know:

• The EPS contribution cannot be withdrawn through regular EPF partial withdrawals
• If you complete 10 years or more of eligible EPS service, you generally become eligible for a monthly pension after reaching the prescribed pension age
• If your EPS service is less than 10 years, you may be eligible to withdraw the pension amount or opt for a Scheme Certificate, subject to the applicable EPS rules

Forms Required to Claim EPF Withdrawals

Different EPFO forms are used for different types of EPF and EPS claims. The table below shows the forms required for different EPFO claims.

Members can submit these forms online through the EPFO Member Portal or avail the EPFO services using UMANG app, provided their UAN is activated and KYC details are updated.

How to Withdraw EPF Balance Under EPFO 3.0?

Along with the existing online claim process, EPFO 3.0 is expected to make PF withdrawals easier through new channels such as UPI and the proposed ATM facility, while also reducing the need for employer approval for eligible claims.

The Latest EPFO 3.0 Updates Include:

• UPI-based PF withdrawals, allowing eligible members to receive their claim amount through UPI-linked bank accounts
• The proposed EPFO ATM facility, which aims to provide easier access to eligible PF withdrawals
• Higher auto-claim settlement limits, enabling faster processing of eligible claims
• Simplified withdrawal rules to reduce paperwork and improve the overall claim experience

Since these initiatives are being introduced in phases, members should refer to the latest EPFO notifications and guidelines for their availability and eligibility conditions.

Final Thoughts

The employee share and employer share in the EPF account, along with the interest credited, are generally withdrawn together in eligible cases. The Employees' Pension Scheme (EPS) contribution is what works differently, as it follows separate withdrawal and pension rules. Knowing this distinction can help you better understand your EPF benefits and avoid confusion while making a claim.

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