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Salary Structure Bug? Tax on Tax Value; Education Cess

bug

#1

Hello,
The new design to take into account Tax Exemptions and Tax Slabs is working well and is pretty good.
However, I am facing difficultly in configuring one particular Tax Component, Education Cess which is 4% of the Tax Amount.
I have configured Education Cess as below

  1. Stored a Statistical Component (S) for Tax Amount which is equal to TDS in my case
  2. Configured Education Cess as S * 0.04
    On Generating the Salary Slip, this is not taken into account, seems like the system is not able to find value of S (which is equal to TDS)
    Please refer to the attached screenshot


    Am I doing anything wrong? Or is it a bug?

#2

I think at this point it’s because TDS == 0. So the system is hiding it. I see that your TDS has no formula or fixed amount.

For testing purposes, try making TDS (row 1) a fixed amount then work it out from there.


#3

Hi @adam26d
You are right since TDS==0, system is not able to calculate TDS * 0.04, for testing I entered an Amount of 100 and it calculated EC (=100*0.04=4)

However, TDS is an amount calculated by system as 822.92, checkout my Salary Slip screenshot
How do I reference that amount to calculate 4% of 822.92?
I tried storing that value as S and then referencing that but I guess that is not the right way

Thanks for the help.


#4

@Manan_Shah I got it mixed up because your salary preview has TDS on row 2 whereas your S.Structure has it on Row 1.

Are there any changes between the two? Please share the updated S. Structure.

From what I can tell your deductions are fine starting from row 2.


#5

Here are the updated screenshots


#6

This means everything starting from row 2 is fine. Row 1 is missing its formula. Dont forget to tick Amount based on formula.


#7

Row 1 - TDS is calculated by the system since it has flag “Value based on Taxable Salary” selected, it does not need formula
I have tick the ‘Amount based on formula’ flag


#8

Yeah, historically I had had problems in ERPNext with such things. I haven’t experimented with the new Payroll Tax features, still using my manual calculation. I’ll advise you do the same if your TDS is a simple calculation.

My Tax is slightly complicated but still achieved through conditions and formulas. Here’s a view of what it looks like:


Payslip


Salary Structure (Employer’s contribution has been removed, GS should be statistical)


#9

Even I was calculating TDS manually before v11, thought of using the new feature where you have to define tax slabs for payroll period and TDS/IT is calculated based on the Tax slabs
Thanks

Would love to know if anyone in the community including Frappe is using v11 to configure their payroll.


#10

:fu:

FYI I’m still using the v10 method in v11. Please share the solution back here when you eventually find it.


#11

@Manan_Shah I hope this helps. I have been calculating tax and it’s working fine. You can find the below screenshots. I have added Income Tax in salary structure (Row 2 w/o any amount) and added Education cess along with formula.

I haven’t given any tax declaration so tax should be calculated on the entire amount i.e. 900,000/- If you check online total tax on 900,000/- is 92,500/- + 3700/- Education cess. If you divide by 12 it comes to 7708.31 + 308.33 EC. After running payroll and generating salary slips, income tax has been calculated properly along with Education cess.

Regards,
Reema


#12

Hi @Reema_Mehta
Thanks for the reply.
I tried configuring again, still no luck with Education Cess calculation.
Can you please share the full configuration of IT and Education Cess? A screenshot with collapsed version of Education Cess and IT Row would be helpful.

Thanks


#13

@Manan_Shah
Hi,
This is all the configuration that needs to be done. In payroll period, define the tax slabs.

For Income Tax, while creating the component I have just checked on “Variable based on Taxable Salary” and default company & account, that’s it. For Education Cess, check on “Amount based on formula”.

Assign the salary structure to an employee and run the payroll entry to generate salary slips.

Regards,
Reema


#14

@Reema_Mehta Thanks for your response.
The feature is working fine on Payroll entries, was not showing Edu Cess on “Preview Salary Slip” option from the “Salary Structure”

Thanks for the help


#15

Yes, it doesn’t show in preview, only while making a payroll entry.

Happy to help :+1: