Income Tax Rates
The Income Tax Rates screen is used to define and manage personal income tax brackets that will be applied when calculating employee income tax in the payroll process.
Accessing the Income Tax Rates Screen
-
Navigate to Thulo HR → Payroll.
-
Select Income Tax Rates.
-
Enter the required tax bracket information.
-
Click Save to store the configuration.
The tax rates configured on this screen will be used by the payroll system to automatically calculate employee income tax during payslip generation.
Tax Rate Fields
The Income Tax Rates screen includes the following fields:
| Field | Description |
|---|---|
| From Value | Starting income amount for the tax bracket |
| To Value | Ending income amount for the tax bracket |
| Tax Rate (%) | Tax percentage applied to income within the bracket |
| Equivalent Value | Cumulative tax amount from previous brackets |
| Effective Rate (%) | Effective tax rate for the bracket |
Calculation Method
For each tax bracket:
Equivalent Value
(To Value - From Value) × Tax Rate + Previous Equivalent Value
Effective Rate
(Equivalent Value × 100) ÷ To Value
The system uses these values to calculate progressive income tax based on the employee's taxable income.
Example
Assume the following tax brackets:
| Taxable Income Range | Tax Rate |
|---|---|
| 0 – 5,000,000 | 5% |
| Above 5,000,000 | 10% |
If an employee's taxable income is 7,890,000:
First Tax Bracket
5,000,000 × 5% = 250,000
Second Tax Bracket
(7,890,000 - 5,000,000) × 10%
= 2,890,000 × 10%
= 289,000
Total Income Tax
250,000 + 289,000 = 539,000
Result: The employee's personal income tax is 539,000.
Notes
-
Income tax calculations are performed automatically during payroll processing based on the tax brackets configured on this screen.
-
Tax brackets should be maintained according to your organization's tax policies and local government regulations.
-
Any changes made to tax rates will affect future payroll calculations after the updated configuration is saved.