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Wrong Income Tax Calculated on Salary Structure

Hi,

i am making salary slip but when i checked the Income Tax it was wrongly calculated.
I added Income tax slabs in payroll period.

Can you explain how erpnext is calculating income tax.

Thanks

Hope you have gone through this documentation -
https://erpnext.com/docs/user/manual/en/human-resources/setting-up-tax

If you can share more details as to what your configurations are, someone would be able to guide you.

i first added payroll period with min and max income tax slabs.
Then i added salary structure and assign it to a employee.

I just add base salary as 80,000 there were no other salary components.
Income slab i made was
start slab = 70,000
end slab = 120000
incometax = 2%

it calculated income tax 267.

i couldnot understand how this amount of 267 was calculated.

can you tell me in which doctype or function it is calculating income tax.

Hi,

In ERPNext, the tax is calculated this way:
It takes the payroll period - the income tax declarations = annual taxable amount. It then calculates the IT on the annual taxable amount and divides it equally for the no of periods (i.e. 12 months or 9 months depending from when you start calculating the salary)

Regards,
Reema

Thanks for your reply.
what will be IT amount for person having salary 80000 monthly.
tax slab = 2%
you can make any slab but it should deduct 2%

Thanks for your reply, what will be income tax for a person getting 80000 monthly salary.
tax slab will be = 2%

if we make annual slabs say

840000 to 1200000 tax will be 2%

erpnext is not calculating any tax in salary slip

Hi,

If it is not working as desired, you will have to check if the payroll IT calculation works fine with other countries tax slabs. For Indian taxation, it works perfectly.

Regards,
Reema

i have tested the code . it is using the basic salary for calculating tax. But what i want it to take annual slab amount as basic for tax calculation.

in code there is written annual tax amount , but actually it is taking monthly amount for tax calculation.

if you can explain its actual method of calculation of income tax.

Thanks