Introduction

Setting up a pay group in Keka helps you organize employees by payroll policies, schedules, and statutory requirements. This step-by-step guide walks you through creating and configuring a pay group, covering pay schedules, statutory deductions, salary structures, and more.

Scope: This setup applies to organizations using Keka Payroll to manage multiple employee groups with distinct payroll needs.

Table of Contents

• Configure the Pay Schedule
• Set Up Contributions and Deductions
• Define the Salary Structure
• Configure Salary Structure Components
• Use the Salary Preview Feature
• Review Declarations and Proof Submission Dates
• Import Payroll Data
• Finalizing Pay Group Setup

Configure the Pay Schedule

1. Go to the Pay Schedule section and click Setup.

   

2. Set the Payroll Start Date:

   • Choose when you want to start payroll in Keka. 

     

3. Set the Pay Schedule End Date:
   • Use the last day of each month for compliance and reporting alignment.
4. Click Save to save the pay schedule.

Set Up Contributions and Deductions

1. On the pay group setup screen, click Setup Contributions and Deductions.

   

2. Toggle required contributions, such as:
   • Provident Fund (PF)
   • Employee State Insurance (ESI)
   • Labour Welfare Fund (LWF)

   • Professional Tax (PT)

     

3. Enter filing details for each enabled contribution:
   • Registration Number (Est ID)
   • Registration Date
   • Signatory (optional)

4. Click Save & Close when done.

   

Define the Salary Structure

1. Click Setup under Salary Structure.

   

2. Set Salary Ranges:
   • Keka may suggest default bands like:
     • 0 – ₹6,00,000 (Class A)
     • ₹6,00,001 – ₹12,00,000 (Class B)
     • ₹12,00,001 – ₹25,00,000 (Class C)
     • ₹25,00,001+ (Class D)

   • You can add, edit, or delete ranges. Deleting merges it into the next range.

     

3. Click Confirm when prompted after range changes.

Configure Salary Structure Components

1. Click Add Salary Component.

   

2. Assign the component to one or more salary ranges.

   

3. Choose or create a component:
   • Predefined components (e.g., Medical Allowance, LTA) are tax-optimized.

   • Custom components offer flexibility (e.g., "Special Allowance").

     • Choose earning or deduction
     • Set annual max limit
     • Indicate if taxable

     

     Note: Predefined components cannot be edited for taxability or limits. Use custom components if changes are needed.

4. Define how the value is calculated:
   • Fixed Amount
   • Percentage of another component
   • Custom Formula

5. Click Save to finalize the component.

   Note: Only earning or deduction components can be created here. FBP or reimbursables must be added later in advanced settings.

   

 Use the Salary Preview Feature

1. In the Salary Preview section, enter a sample annual salary (e.g., ₹5,00,000).

  2. Click View Breakup to see the detailed earnings and deductions.

  3. If needed, return to salary structure to make adjustments.

Review Declarations and Proof Submission Dates

Set Monthly Declaration Window:

• Define when employees can submit investment declarations each month.
• Example: From the 1st to the 22nd of each month.
• After the 22nd, declarations for that month are locked.

Set Financial Year Cutoff Date:

• Final date for yearly declarations (e.g., 22nd January).
• No declarations allowed after this date for the financial year.

Special Rule for New Joinees:

• Employees who join after the cutoff can submit declarations within 30 days of joining or by 22nd February, whichever is earlier.
• The 22nd February is a default and can be customized.

Set Proof Submission Due Date:

• Employees must submit proof for declared investments (e.g., receipts).

• Typically aligned with the financial year cutoff (e.g., 22nd January).

  Note:  Declarations without proofs submitted by this date won’t be considered for tax exemptions.

 Import Payroll Data

After setting declaration deadlines, go to Payroll Imports to upload payroll-related data:

• Current Salaries: Upload active employee salaries in bulk.
• Previous Salaries: Import past salaries for tax calculations and continuity (up to 7 years).
• Financial Information: Upload PAN, bank details, PF numbers, etc.

• Investment Declarations: Import declared investments for employees who’ve already submitted them.

  Note : If you don’t have this data immediately, you can add it later.

Finalizing Pay Group Setup

Once you've completed:

• Pay schedule setup
• Statutory contributions and deductions
• Salary structure and components
• Declaration timelines

• Payroll data imports

  

Your pay group setup is complete. Review your configuration carefully to ensure accuracy. Keka will now manage salary calculations, statutory filings, and payroll processing seamlessly.