Wrong Income Tax Calculated on Salary Structure

Frappe HR
1

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

2

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.

3

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.

4

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

5

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%

6

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

7

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

8

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

9

The tax calculation is not correct. For the details I entered below the tax amount is not right. Not sure what is the issue

24%20PM
24%20PM990×269 16.4 KB

I have configured all the details as per the instructions.

10

Any update/resolution how income tax get calculted