Managing Earnings and Deductions in Keka

Earnings

Earnings refer to the total compensation an employee receives before any deductions are made. This includes various types of pay for the work done or services provided by the employee. Common types of earnings include:

• Basic Salary/Wages: Regular pay based on salary or hourly rate.
• Overtime: Pay for hours worked beyond the standard workweek.
• Bonuses and Commissions: Extra earnings for performance or sales.
• Allowances: Payments for specific needs like housing or transportation.

Deductions

Deductions are amounts withheld from an employee’s gross earnings to cover taxes, benefits, and other obligations. Deductions can be classified as mandatory or voluntary.

• Mandatory: Such as federal and state income taxes, Social Security, and Medicare.
• Voluntary: Including health insurance, retirement contributions, and garnishments (e.g., child support).

Effective management of employee earnings and deductions is crucial for accurate payroll processing. Keka HR offers a robust platform to handle various earnings and deductions types, ensuring that payroll runs smoothly and adheres to organisational policies and compliance requirements. Here’s a step-by-step guide to navigating the Earnings and Deductions section in Keka.

Navigating to Earnings and Deductions

Log in to your Keka account. From the main dashboard, navigate to the Payroll (1) tab and select Settings(2) and click on Earnings & Deductions(3) under the settings.

The Earnings and Deductions section offers a comprehensive overview of both predefined and custom earning and deduction types. 

Keka includes several predefined earnings & deductions like  health insurance premiums, and professional tax. Predefined components are particularly valuable as they streamline the payroll process by providing standard options that can be easily integrated into any employee's compensation package. These components, such as cash tips, Group term life, Other Imputed, Non Hourly Regular, come with preset fields to ensure that all necessary information is captured accurately, facilitating efficient payroll management.

Here, you can add new types or manage existing ones according to your organization’s needs.

Adding an Earning Type

Click on the Add button and from the drop down select Add Earning Type. This action will open a form where you can enter the details required to create a new earning type.

For more specialised earning types, you can create custom entries. You will need to provide:

• Name of the Earning: A descriptive name for the earning type.
• Earning classification:  Select the appropriate earning classification from the dropdown menu. This classification helps in categorizing the type of earning, such as Bonus, Commission, Severance, Tip, Salary Adjustment, Other Imputed, Other Earning, Group Term Life, etc.
• Taxability: The tax status will be automatically determined based on the classification you select.
• Effective Date: Specify the effective date for this earning, indicating that it will be visible to the employee pay structure starting from the next pay period following this date.

Once you have filled in all the required details, save the new earning type. You have the option to enable or disable it according to your organization's payroll needs. Enabling an earning type allows it to be included in employee compensation packages, while disabling it temporarily removes it from the payroll calculations. By default, any new earning type you create will be enabled, ensuring that it is available for immediate use in the upcoming pay period.

Adding a Deduction Type

Similar to earnings, click on the Add Deduction Type button to start creating a new deduction type.

For deductions unique to your organization, you can create custom types. You will need to provide:

• Name of the Deduction: A descriptive name for the deduction.
• Deduction Type: There are two categories of deductions available: child support garnishment, which is specifically designated for child support payments—Keka facilitates automatic payments of child support garnishments to the relevant authorities, provided that all necessary details are accurately entered—and miscellaneous deductions, which encompass all other types of deductions that do not fall under child support garnishment.
• Description: Provide a description of the component.
• Note to Employee (Optional): Enter any notes for the employee, if applicable.
• Applicability: Specify which employees or groups this deduction applies to.
• Taxability: Indicate whether this deduction is pre-tax or post-tax.

Managing Earnings and Deductions

Viewing Existing Components

All existing earnings and deductions are listed under the Earnings & Deductions section. Use the search bar to quickly find specific components. 

Editing Components:

To edit a component, click on the edit icon, make the necessary changes, and save the updates.

Enabling or Disabling Earnings and Deductions

You have the flexibility to enable or disable earnings and deductions according to your organisation's requirements.

By effectively managing the earnings and deductions in Keka, organizations can streamline their payroll process and ensure accurate compensation for employees. Follow the steps outlined above to add, edit, and manage your payroll components efficiently.