Short answer
In the Hanafi fatwa, not on the compulsory part until you receive it, because it is not yet in your hands or under your control. Once paid out it joins your wealth, with no zakat for the years it sat in the fund. Extra contributions you choose to make are zakatable every year.
Following Mufti Muhammad Shafi's fatwa, Deobandi institutions treat compulsory provident fund deductions like wages not yet received: no zakat is due on them while in the fund, nor for past years once paid. Voluntary contributions are made by your choice from money you owned, so they are zakatable each year.
The four schools agree on this.
Explanation
A provident fund is a compulsory retirement scheme: part of your salary is deducted, the employer adds a share, and the total is paid out at retirement or for set purposes. Examples are the EPF (KWSP) in Malaysia and India, the CPF in Singapore, and provident funds in Pakistan.
Mufti Muhammad Shafi wrote a well-known fatwa on this, and Darul Uloom Deoband and other Hanafi institutions follow it. The deducted money never came into your hands, and you cannot use it as you wish, so it is like salary your employer still owes you. Zakat is not due on it while it is in the fund.
- Compulsory deductions and the employer's share: no zakat until received.
- When it is paid out: it joins your other wealth. If you already own the nisab, it is zakated on your next zakat date; if not, your zakat year starts when you reach the nisab. No zakat is owed for past years.
- Voluntary extra contributions: these came from money you owned and chose to put in, so they are zakatable every year, like savings.
The additions credited to the compulsory part were discussed in the same fatwa, which did not treat them as interest in the technical sense because the money was not yet yours. Many muftis still advise giving them away as a precaution, and any interest on voluntary contributions must be given away.
Some contemporary scholars, including some of other schools, count the withdrawable balance every year. If your scheme lets you take money out freely, ask a mufti how that part is treated. For 401k, IRA, ISA and workplace pensions, see zakat on 401k and pensions.
The evidence
Quran, Surah At-Tawba 9:103
خُذْ مِنْ أَمْوَٰلِهِمْ صَدَقَةًۭ تُطَهِّرُهُمْ وَتُزَكِّيهِم بِهَا وَصَلِّ عَلَيْهِمْ ۖ إِنَّ صَلَوٰتَكَ سَكَنٌۭ لَّهُمْ ۗ وَٱللَّهُ سَمِيعٌ عَلِيمٌ ﴿١٠٣﴾
Take, [O, Muhammad], from their wealth a charity by which you purify them and cause them increase, and invoke [Allah 's blessings] upon them. Indeed, your invocations are reassurance for them. And Allah is Hearing and Knowing.
Zakat is taken from wealth that is truly yours.
Sunan Ibn Majah 1792
Graded sahih... لا زكاة في مال حتى يحول عليه الحول ...
"There is no zakat on wealth until a year has passed over it."
Zakat runs on wealth held in your ownership over a year.
Where the ruling is recorded
- Jawahir al-Fiqh (Mufti Muhammad Shafi), Treatise on zakat and interest in the provident fund. Compulsory provident fund money is not zakatable until received, and the additions on it are not interest in the technical sense.
- Radd al-Muhtar, Kitab al-Zakat, chapter on the zakat of wealth, section on strong, middle and weak debts. Some claims are zakatable only after they are received.
Checked by our team. For a more accurate answer to your own situation, consult a scholar. Quran translation by Sahih International. Hadith Arabic from the standard editions of the six books and the Muwatta, with gradings as recorded there; the English is our own rendering. Spotted a mistake? Tell us.