We are facing a challenge with calculating income tax for contractual employees in ERPNext. Our requirement is to calculate the annual income tax based solely on the actual contracted period of employment, which can vary significantly from a full year.
For example, if an employee is hired for only 6 months, we need the system to calculate their income tax based on their 6-month salary, not on an assumed 12-month salary or a prorated amount based on remaining months in the year.
The current system seems to default to annual calculations, which is inaccurate for our contractual workforce.
Has anyone encountered this issue and found a solution or workaround within ERPNext?
Possible solutions we’ve considered (but haven’t implemented):
- Custom Script: Could a custom script be used to override the default tax calculations and base them on the actual contract duration?
- Custom Field: Adding a custom field to the employee record to specify the contract duration and using this field to adjust tax calculations.
- Workaround within existing settings: Are there any existing settings or configurations within ERPNext that we might be overlooking to achieve this specific calculation?
We appreciate any insights, suggestions, or best practices from the community on how to handle this scenario effectively within the ERPNext framework.