diff --git a/erpnext/setup/doctype/employee/employee.json b/erpnext/setup/doctype/employee/employee.json
index 4069813e318..94dca869eda 100644
--- a/erpnext/setup/doctype/employee/employee.json
+++ b/erpnext/setup/doctype/employee/employee.json
@@ -29,6 +29,8 @@
   "erpnext_user",
   "user_id",
   "create_user_permission",
+  "column_break_xwnm",
+  "create_user_automatically",
   "company_details_section",
   "company",
   "department",
@@ -286,12 +288,20 @@
   },
   {
    "default": "1",
-   "depends_on": "user_id",
+   "depends_on": "eval:doc.user_id || doc.create_user_automatically",
    "description": "This will restrict user access to other employee records",
    "fieldname": "create_user_permission",
    "fieldtype": "Check",
    "label": "Create User Permission"
   },
+  {
+   "default": "0",
+   "depends_on": "eval:doc.__islocal",
+   "description": "This will create User for this employee depending on the Company Email.",
+   "fieldname": "create_user_automatically",
+   "fieldtype": "Check",
+   "label": "Create User Automatically"
+  },
   {
    "allow_in_quick_entry": 1,
    "collapsible": 1,
@@ -447,6 +457,7 @@
    "fieldname": "company_email",
    "fieldtype": "Data",
    "label": "Company Email",
+   "mandatory_depends_on": "create_user_automatically",
    "oldfieldname": "company_email",
    "oldfieldtype": "Data",
    "options": "Email"
@@ -809,6 +820,10 @@
    "fieldtype": "Data",
    "label": "IBAN",
    "options": "IBAN"
+  },
+  {
+   "fieldname": "column_break_xwnm",
+   "fieldtype": "Column Break"
   }
  ],
  "icon": "fa fa-user",
@@ -816,7 +831,7 @@
  "image_field": "image",
  "is_tree": 1,
  "links": [],
- "modified": "2026-02-16 13:06:01.752904",
+ "modified": "2026-02-19 12:48:22.080419",
  "modified_by": "Administrator",
  "module": "Setup",
  "name": "Employee",
diff --git a/erpnext/setup/doctype/employee/employee.py b/erpnext/setup/doctype/employee/employee.py
index 48819a70ef4..cb5e2504b3e 100755
--- a/erpnext/setup/doctype/employee/employee.py
+++ b/erpnext/setup/doctype/employee/employee.py
@@ -49,6 +49,7 @@ class Employee(NestedSet):
 		company: DF.Link
 		company_email: DF.Data | None
 		contract_end_date: DF.Date | None
+		create_user_automatically: DF.Check
 		create_user_permission: DF.Check
 		ctc: DF.Currency
 		current_accommodation_type: DF.Literal["", "Rented", "Owned"]
@@ -125,6 +126,7 @@ class Employee(NestedSet):
 		self.set_employee_name()
 		self.validate_date()
 		self.validate_email()
+		self.validate_auto_user_creation()
 		self.validate_status()
 		self.validate_reports_to()
 		self.set_preferred_email()
@@ -159,6 +161,10 @@ class Employee(NestedSet):
 			self.validate_for_enabled_user_id(data.get("enabled", 0))
 			self.validate_duplicate_user_id()
 
+	def validate_auto_user_creation(self):
+		if self.create_user_automatically and not self.company_email:
+			frappe.throw(_("Email is mandatory when Create User Automatically is enabled"))
+
 	def update_nsm_model(self):
 		frappe.utils.nestedset.update_nsm(self)
 
@@ -170,6 +176,19 @@ class Employee(NestedSet):
 			self.update_user_permissions()
 		self.reset_employee_emails_cache()
 
+	def after_insert(self):
+		if not self.create_user_automatically:
+			return
+
+		if self.user_id:
+			return
+
+		create_user(
+			employee=self.name,
+			email=self.company_email,
+			create_user_permission=self.create_user_permission,
+		)
+
 	def update_user_permissions(self):
 		if not self.has_value_changed("user_id") and not self.has_value_changed("create_user_permission"):
 			return
@@ -406,7 +425,7 @@ def create_user(employee, user=None, email=None, create_user_permission=0):
 	if email:
 		email = cstr(email).strip().lower()
 	else:
-		email = emp.prefered_email
+		email = emp.company_email
 
 	if not email:
 		frappe.throw(_("Email is required to create a user"))
@@ -436,7 +455,7 @@ def create_user(employee, user=None, email=None, create_user_permission=0):
 	user = frappe.new_doc("User")
 	user.update(
 		{
-			"name": emp.employee_name,
+			"name": email,
 			"email": email,
 			"enabled": 1,
 			"first_name": first_name,
@@ -446,7 +465,6 @@ def create_user(employee, user=None, email=None, create_user_permission=0):
 			"birth_date": emp.date_of_birth,
 			"phone": emp.cell_number,
 			"bio": emp.bio,
-			"send_welcome_email": 1,
 		}
 	)
 	user.append_roles("Employee")