Withholding Tax Calculation

1

I have noticed that the calculation of Withholding tax is based on gross value instead of the net.
Please see my example.

Sample WHT Deduction
Invoice Value 100,000.00
VAT @ 5% 5,000.00
Invoice Total 105,000.00

Withholding tax @ 5% 5,000.00
Net Payment 100,000.00

The system currently base its calculation on 105,000 instead of 100,000.

Please help.

2

That is the way it is designed, because in most locations where tax is deducted at the source (withheld), the calculation is based on total invoice balance, including tax. See this Guide: Manager Cloud. If your tax jurisdiction requires withholding only on the subtotal (without tax), calculate the amount and enter directly as an amount rather than as a percentage.