I am trying to set up payroll and facing an issue with deducting income tax.
I have done the following setup.
1: Created Payroll Period
2: Created Tax Slabs
3: Created Salary Component (earning and deduction)
4: Created Salary Structure
5: Assigned Salary Structure to an employee with Base Salary
6: Generated Salary Slip.
when I generate the Salary Slip I can see that the earning component is added but there is nothing added for the deduction. According to the base salary and TAX slabs, there should be a deduction of 20%.
I have tried several things even changing slabs increasing the base salary, doing payroll entry, and then generating slips, but the system never deducts the income tax and the payslip deduction area is always empty.
(i am assuming that tax slabs are based on a yearly salary and “base” in “Salary Structure Assignment” is monthly. please correct me if I am wrong)
I am attaching the image of each step.