Creating and managing salary structures for a pay group

Introduction

Salary structures define how an employee’s pay is broken down—what components are included and how much value each holds. Setting up the right structure helps reduce tax liabilities and ensures compliance with statutory deductions, while also maximizing take-home pay.

Keka provides built-in range-based salary structures and lets you create custom or daily wage-based structures tailored to your organization.

Applies to: Payroll Admins using Keka
Access: Go to Payroll > Settings > Pay Groups, then select Configure next to your chosen pay group and click the Salary Structures tab.

Range-Based Salary Structures

These are predefined structures grouped by salary range. You can edit them or create your own.

Edit, Create, or Delete Salary Ranges

1. In Payroll Settings, go to Salary Structures > Range Based tab.

2. Select a salary range and click Edit Salary Structure.
   
   

3. Click the Edit icon in the Salary Ranges pane.

4. In the Manage Salary Range window, update:

   • Lower Limit

   • Upper Limit

   • Range Name

   • Optional Description

5. To split a range:

   • Click the Split Range icon

   • Adjust the upper limit of the existing range
     
     
      

6. To delete a range:

   • Click the Delete icon or you can also delete the salary range by clicking on the three dots next to the salary range name.
     
     
     
     
      

   • Confirm by typing CONFIRM

   • Employees will be reassigned to the next appropriate range
     
     
      

Update Component Values

1. On the Edit Salary Structure page, select a component.

2. Click the edit icon next to Formula for Value / Fixed Value.
   
   

3. In the Update Value of Component window:

   • Enter a fixed value or

   • Create a formula using the annual value of other components
     Example: PF = 12% of Basic (Annual Basic = Monthly Basic × 12)

4. Click Update.
   
   

Add New Component

1. On the Edit Salary Structure page, click Add Component.

2. Select a component from the list.

3. Click Add Component to include it in the structure.
   
   

Include in Flexible Benefits Plan

1. On the salary structure setup page, check Salary Structure is a Part of Flexible Benefits Plan.

2. This allows employees to choose tax-saving benefits and submit claims.
   
   

Add Hourly Rate for Overtime

1. In the Hourly Pay section, click + Add Calculation.
   
   

2. In the Add Calculation for OT window:

   • Use a formula or fixed value based on annual component values
     Example: Hourly Rate = Annual Basic / 2920

3. Click Update.
   
   

Custom Salary Structures

Use custom structures if you want to replicate your organization’s existing pay format.

Create a New Custom Salary Structure

1. Go to Custom Salary tab.

2. Click Create Custom Salary Structure.
   
   

3. In the creation window:

   • Enter a Name and optional Description

   • Toggle on/off PF, ESI, and choose TDS method (slab or formula)

   • Add or edit salary components:

     • Click on a component

     • Click Edit, enter a formula or fixed value, then click Update
       
       

   • Click Add Component to include more components
      

4. To delete a component:

   • Click the three dots next to it and select Delete Component

   • Confirm by typing CONFIRM

   • Deleted amounts shift to Special Allowance
     
     

5. To make the structure part of FBP, check This Structure is Eligible for Flexible Benefits Plan.
   
   

6. To add an overtime rate:

   • Click + Add Calculation in the Hourly Pay section

   • Use the annual value formula (e.g., Annual Basic / 2920)
     
     

7. Click Create to finish.

Clone an Existing Structure

1. On the Custom Salary tab, click the Clone Salary Structure icon.

2. Make the required edits.

3. Click Create.
   
   

Delete a Custom Structure

1. Click the Delete icon for the structure.

2. Confirm by clicking Delete in the popup.
   
   

Edit a Custom Structure

1. Click the Edit icon next to the structure.

2. Make changes and click Update.
   
   

Daily Wage Salary Structures

Ideal for employees paid on a daily basis.

Create a Daily Wage Structure

1. Go to the Daily Wage tab.

2. Click Create Daily Wage Salary Structure.
   
   

3. Enter details and component values.

4. Click Create.
   
   
    

You can create multiple daily wage structures this way.

Manage Daily Wage Structures

• From the Daily Wage tab, you can:

  • Edit

  • Clone

  • Delete salary structures using options under the Actions column.
    
    

Examples & Use Cases

Example: Hourly Pay Rate Calculation

• Annual Basic = ₹360,000

• Hourly Rate = ₹360,000 / 2920 = ₹123.29 per hour

Example: PF Component

• Monthly Basic = ₹15,000

• Annual Basic = ₹180,000

• PF = 12% of ₹180,000 = ₹21,600 annually