We have observed an increase in queries concerning discrepancies in previously imported salary data, particularly related to the Provident Fund (PF) employer contribution being included in the employee's total gross salary. It's important to understand that the configurations set within Keka HR apply to payrolls processed directly through the system and may not affect imported payroll data. To address and rectify these discrepancies, please follow the steps outlined below:
Step 1: Verify PF Settings in Annual Salary
Ensure that your PF settings are correctly configured within the annual salary structure. This configuration determines how PF contributions are calculated and displayed. For detailed guidance on updating PF settings for a pay group, refer to the following article:
Updating PF (Provident Fund) settings for a pay group
Step 2: Assess Imported Gross Values
Examine the imported gross salary values to determine if they have been adjusted by subtracting the employer's PF contribution. If the employer's PF portion has not been deducted, it can lead to inaccuracies in tax calculations.
Step 3: Adjust Gross Earnings Accordingly
If the employer's PF amounts were not deducted from the gross earnings during import, calculate the PF employer contributions for each relevant month and subtract them from the employee's gross earnings for those months. This adjustment ensures that the gross salary reflects accurate taxable income.
Step 4: Process Payroll and Determine Tax Regime
After making the necessary adjustments, proceed to process the payroll. Identify whether each employee falls under the new or old tax regime, as this affects tax calculations. For information on how employees can change their tax regime, refer to the following article:
How can an employee change the tax regime?
Step 5: Validate Tax Calculations for Old Regime Employees
For employees under the old tax regime, verify that the tax calculations are accurate now that the gross earnings have been adjusted to exclude the employer's PF contribution. This step ensures compliance with tax regulations and accurate payroll processing.
Important Note:
Currently, if the "Hide PF in payslips" option is enabled, the above adjustments are necessary to correct tax calculations. However, this process may cause discrepancies between the payslip values and the actual calculations, which could be confusing or deemed inappropriate. It is crucial to communicate these adjustments clearly to clients to maintain transparency and trust.
For further assistance or clarification, please do not hesitate to reach out to our support team.