How to Setup Payroll in Keka US

Setting up payroll in the U.S. involves several important steps to ensure employees are paid correctly and on time while complying with tax and legal requirements. From defining pay schedules to managing tax filings, each step requires attention to detail. This guide walks through the process of setting up a pay schedule, adding signatory and bank details, handling statutory tax filings, and ensuring authorization. By following these steps, companies can streamline payroll management and remain compliant with all necessary regulations.

Table of contents

• Setting Up a Pay Schedule

• Adding Signatory Details

• Adding Bank Information

• Setup Statutory and Tax Filing

• Filing Authorisation

• Benefits

After adding a new pay group, you will see six steps that must be completed to set up payroll. If you have already set up a legal entity and provided the necessary bank and signatory information, you can skip re-entering this data and start directly with the tax and filing information. Selecting a legal entity is the first step in the payroll setup process; therefore, it is essential to create and choose the appropriate legal entity when establishing a pay group. If you have just created a legal entity but have not yet provided bank and signatory details, you can complete those steps during the pay group setup.

 

Step 1: Setting Up a Pay Schedule

The first step in creating a pay group is to set up the pay schedule. This involves defining the pay frequency, selecting pay dates, and naming the pay schedule, click on setup to start setting up pay schedule.

The first step is to select legal entity that this pay group belongs to.

[setting up legal entity article have to be linked here]

Next choose the pay frequency from the available options: 

Weekly, Bi-weekly, Semi-monthly, or Monthly pay frequencies are essential choices that determine how often employees receive their compensation.

• Weekly Pay Frequency: This option allows employees to be paid once a week, typically on the same day each week (e.g., every Friday). It provides employees with a consistent cash flow, making it easier for them to manage their day-to-day expenses. This frequency is often preferred in industries with hourly workers or those dependent on tips, as it helps individuals maintain financial stability.
• Bi-weekly Pay Frequency: In this system, employees receive their paychecks every two weeks, resulting in 26 pay periods per year. This method is widely adopted as it balances regular income with administrative efficiency. Bi-weekly pay periods are beneficial for payroll processing, as they simplify the calculation of overtime and employee benefits, which often align with this frequency.
• Semi-monthly Pay Frequency: This schedule involves paying employees twice a month, usually on specific dates such as the 1st and 15th. It results in 24 pay periods annually. Semi-monthly pay can be advantageous for salaried employees, as it aligns closely with monthly budgeting practices, enabling easier financial planning.
• Monthly Pay Frequency: Employees are paid once a month, typically at the end of the month. While this frequency can simplify payroll processing for employers, it may require employees to manage their finances carefully, as they need to stretch their income over a longer period. Monthly pay is often seen in professional or managerial roles where salaries are fixed and budgeting is more manageable for employees.

Each pay frequency has its advantages and considerations, and employers should select the option that best fits their workforce's needs and their organisational structure.

Next, select the start and end dates for the pay period. The chosen pay dates must align with the selected pay frequency and should not fall on holidays. This ensures a smooth payroll process and timely payments for employees.

• For weekly pay frequency, select one pay date per week.
• For bi-weekly pay frequency, select one pay date every two weeks.
• For semi-monthly pay frequency, you need to select two pay dates (e.g., 1st and 15th of the month). Please note that holidays cannot be selected as pay dates.
• For monthly pay frequency, select one pay date per month.

Provide a descriptive name for the pay schedule. This helps in identifying and managing multiple pay schedules within the system.

Step 2: Adding Signatory Details

After setting up the pay schedule, the next step is to add the signatory details. The signatory is the individual designated to oversee and authenticate payroll transactions, and their details will be utilized on all relevant filings and tax documents, click on setup to start.

Fill in the required fields:

• • • First Name: Enter the first name of the signatory.
    • Middle Name: Enter the middle name (if applicable).
    • Last Name: Enter the last name of the signatory.
    • Designation: Enter the designation (e.g., Managing Director).
    • Email: Enter the email address of the signatory.

Click Save signatory after entering all the necessary information. You need to provide additional documents to verify the signatory.

Step 3: Adding Bank Information

The next step is to add and verify bank details to facilitate employee payments, click on setup to start adding bank details.

You have two options for verifying bank details:

• Plaid Verification (Recommended): Connect and verify your bank account automatically using Plaid.
• Manual Verification: Enter bank details manually, which takes longer for verification.

If you choose Plaid verification, follow the prompts to securely connect your bank account. Plaid is a secure method that encrypts your bank data end-to-end and ensures privacy.

Once you have connected the account, make sure to select the authorised signatory (1) and authorise (2) the connection.

If you opt for manual verification, you will need to enter the following details:

• Bank Name: Select your bank from the dropdown list (e.g., Citibank, Bank of America).
• Account Type: Choose the type of account (e.g., Checking, Savings).
• Routing Number: Enter the routing number of your bank.
• Account Number: Enter your bank account number.
• Confirm Account Number: Re-enter the account number to confirm it.

Select the authorised signatory from the dropdown list to authorise payroll debits, click Authorize and send for verification to proceed.

Once you have completed the steps, you will need to agree to the terms and conditions of the payroll user service in order to authorise debit transactions through Keka's payroll system.

Step 4. Setup Statutory and Tax Filing

Federal and State Jurisdictions: Choose all relevant jurisdictions in which your employees are employed. This includes both federal and state jurisdictions, as accurate jurisdiction selection is essential for ensuring compliance with tax laws and regulations. Proper jurisdictional setup helps in the accurate calculation of taxes and facilitates timely and correct filing, thereby avoiding potential legal issues and penalties.

Next, you will need to input Tax Details and select an Authorised Signatory who will be responsible for tax filings. To initiate the Tax Setup process, simply click on Initiate Tax Setup to proceed smoothly.

Once you click on the initiate tax setup button, a section will appear for you to enter both federal tax information and state tax information.

In the Federal Tax Setup section, you will need to provide the Federal Employer Identification Number (FEIN) and save it to complete this step.

When setting up state tax filing information, you will need to provide specific details for your location. This includes entering information such as the Washington State Employment Security Reference Number, Labor & Industries Account Identification Number, as well as various tax rates like EAF and Unemployment Insurance Tax Rate.

Additionally, you should include the PAC Number, Unified Business Identifier, and confirm whether the Washington Voluntary Plan PFML Exemption applies. Make sure to provide effective dates for each piece of information to ensure accurate tax filings and compliance.

Step 5: Filing Authorisation

During this stage, carefully examine and sign the forms below to authorise your payroll processing. After selecting setup, choose the authorized signatory from the dropdown menu. Click on 'Initiate Authorization' to move forward.

Review and electronically sign the necessary federal forms directly within Keka. Make sure all required authorization forms are signed and submitted promptly. Click on complete to move forward.

 

Step 6. Benefits 

Following these steps ensures a comprehensive setup of the pay group within Keka, covering pay schedule, signatory details, bank verification, tax filing setup, filing authorisation and benefits. This process is designed to streamline payroll management and ensure compliance with statutory requirements.