Using Full & Final Settlement in US Payroll

Accessing Full & Final settlement

Once an employee’s exit is approved, you can review and finalise their US payroll settlement from the Exits area.

1. Go to Manage > Finances.
2. Find the exiting employee under the Exits section (for example, in Need attention or Pending exits).
3. Click Review and finalise to open the 2-step settlement flow:
   • Step 1 – Pay items
   • Step 2 – Finalise

Note
The Review and finalise button will be disabled until all prerequisites are met. See the section below for details.

Understanding settlement statuses

The exit finance settlement has three overall statuses:

1. Finalisation Pending
   • The settlement is not yet finalised.
   • You can enter and save data in Step 1, but until you finalise in Step 2, status stays Finalisation Pending.
2. Settlement Pending
   • You have finalised the settlement in Step 2.
   • The pay cycle including the F&F payout has not yet been processed.
   • You can still make changes (see behaviour under Step 2).
3. Settled
   • The finalised settlement has been processed in payroll.
   • The exit settlement is complete and read-only.

You can always see this status in the employee’s Exit → Finances section.

Prerequisites before review & finalisation

You can start Full & Final review only after these conditions are met:

Required pay cycles are closed or skipped

All pay cycles before the pay cycle in which the Last Working Day (LWD) falls must be either:

• Finalised, or
• Skipped

If any earlier cycles are still open, the Review and finalise button will not be available.

Important
If you have skipped a previous cycle, salary for that cycle is not automatically included in F&F.

• You can:
  • Add the missed amount manually as an earning in Step 1, or
  • Run a separate off-cycle payroll later (not from this exit flow).

Employee and entity information is complete

If any information required to run payroll is missing or invalid (for example, DOB, DOJ, address, tax configuration, etc.):

• Keka shows these as errors (and warnings) following the same pattern as Need attention.
• You must fix all errors before you can proceed to review and finalise.

For each item:

• Click the action (for example, Update).
• You’ll be taken to the correct page:
  • Employee’s finance profile, or
  • Legal entity / tax settings, etc.

Warnings can be left unresolved, but errors are blocking.

Error & warning behaviour by status

• Before any review (Finalisation Pending)
  • All errors and warnings are shown.
  • Review and finalise is disabled until all errors are resolved.
• After one review, still Finalisation Pending
  • If new errors arise, they are shown again and block review and finalise.
• After Finalisation (Settlement Pending)
  • New errors are not shown and do not block.
  • Only unresolved warnings (from earlier) remain visible below pay details.

 Review pay items

In Step 1 – Pay items, you review and adjust all items that affect final pay:

1. Pay breakdown (earnings, deductions, benefits)
2. Time off & attendance
3. Expense reimbursements
4. Asset damage charges

Each section has its own Save button and behaves slightly differently for employees vs contractors.

Who sees what?

• Employees: Regular pay, additional earnings, deductions, benefits, time off, OT, shift differential, expenses, asset damage.
• Contractors: Regular pay, reimbursements (in place of additional earnings), time off (if applicable), expenses, asset damage. No benefits or employee deductions sections.

Pay breakdown (earnings, deductions, benefits)

1. Regular pay

This section shows only regular pay components:

• Hourly wages
• Piece-based pay
• Salaried (per annum) pay

Columns include:

• Component name
• Job code and location (if multiple pay rates)
• Rate (not editable)
• Hours / Pieces
• Amount (calculated from rate × hours/pieces)

You can:

• Override hours (and pieces where applicable).
• The amount updates dynamically.

Proration logic:

• Hourly employees
  • Final pay is based on actual hours received from Workforce for that pay period.
• Piece-based employees
  • No automatic proration.
  • You enter pieces/hours manually.
• Per-pay-period contractors
  • If a contractor is paid “per pay period”, the amount is not prorated even if LWD is mid-cycle.
• Per annum employees
  • Keka first calculates an hourly rate:
    • Hourly rate = Annual salary ÷ default annual hours
  • Then calculates payable hours as:
    • Total hours in the pay period – (hours × number of working days after LWD)
  • Example (simplified):
    • Frequency: Biweekly (80 hours)
    • Cycle: 1–14 April
    • LWD: 8 April
    • Annual pay: USD 2,080 (default 2,080 hours → USD 1/hour)
    • Days not worked: 9–14 April = 6 days, of which 4 are working days
    • Payable hours: 80 – (4 × 8) = 48
    • Regular pay: 48 × USD 1 = USD 48

Multiple job codes and location handling:

• If Workforce sends hours for job codes that are not yet configured in pay:
  • You see an error that pay needs revision so these hours can be paid in F&F.
• If pay has multiple job codes but Workforce sends hours for only some of them:
  • All job codes appear.
  • Missing ones show 0 hours/pieces; you can override if needed.
• For employees with multiple rates:
  • Regular earnings show Job code.
  • Each row includes a Location field (work location by default; you can change it).
• For contractors:
  • Work location is fixed (cannot be changed).

Additional earnings / reimbursements

• For employees, this shows all additional earning components from pay except:
  • Regular earnings
  • Overtime
  • Shift differential
  • Leave encashment (comes via time off)
  • Expense/advance items and asset damage (have their own sections)
• For contractors, this appears as Reimbursements and includes reimbursement components from pay.

Columns include:

• Component name
• Location (if applicable)
• Rate (for rate-based components)
• Hours (for hour-based components)
• Amount

What you can do:

1. Add components
   • Click Add earning (employees) or Add reimbursement (contractors).
   • Choose from pre-defined and custom components (excluding regular hourly/piece/per-annum earnings).
2. Override amounts and hours
   • You can override hours; amount recalculates.
   • You can override the amount directly.
   • If you don’t want to pay a component, set its amount to 0.
3. Future-dated one-time earnings (employees)
   • One-time earnings already set in pay appear with their Pay date.
   • If the pay date is after the end date of the next pending pay cycle:
     • The component is tagged as Due in future.
     • An extra column Pay action appears with:
       • Pay (include in this settlement)
       • Void (default)
     • You can override the amount without affecting the original compensation setup.
4. Proration
   • Additional earnings and reimbursements are not automatically prorated for mid-cycle exits.
   • Adjust them manually if needed.

Deductions (employees only)

This section lists all deduction components defined in the employee’s pay.

Columns include:

• Deduction name
• Description
• Start date
• Per-pay-period amount
• End date (visible only after the settlement has been processed and you’re viewing the finalised record)

What you can do:

• Override the per-pay-period amount (no automatic proration).
• Add a custom miscellaneous deduction via Add deduction.

Child support garnishments
If the employee has an active child support garnishment, Keka reminds you that the employer is responsible for informing the relevant agency about the discontinuation after termination.

End date logic:

• For deductions added during F&F:
  • Once payroll with F&F is processed, the deduction’s end date is automatically set to the pay date of that cycle.
• For existing deductions without an end date:
  • Keka does not auto-set one.

Any deduction added here will appear in the employee’s pay profile once the payroll with F&F is finalised.

Benefits (employees only)

Shows both manual and integrated benefits with their contributions.

Columns include:

• Benefit name
• Employee contribution amount
• Employer contribution amount
• Start and end dates (shown only when viewing a settled F&F record)

What you can do:

• Override employee and employer contribution amounts as needed.
• Amounts are not prorated automatically.

End date logic:

• For manual/integrated benefits without an existing end date:
  • Keka does not auto-populate an end date as part of F&F.
• Integrated benefits:
  • Once the exit is approved, Keka passes the employee’s last working date as the termination date to the benefits provider (via Check).
  • For SimplyInsured health benefits:
    • The employee is removed from coverage on the 1st of the month following termination.
    • The broker communicates coverage end and COBRA details directly to the employee.

Note
If you later change the employee’s last working date after F&F has been finalised, any benefit/deduction end dates already set will not be updated.

Time off & attendance

Unused time off balances

Shows all available time off balances, regardless of whether encashment is allowed in the time off policy.

Columns include:

• Time off type
• Balance (hours/days)
• Units to encash (hours/days)
• Encashment rate
• Amount

Behaviour:

• Each time off type shows the current balance.
• Default encash quantity is 0 for all types.
• Encashment rate:
  • For hourly and per annum employees: pre-filled with hourly rate.
  • For piece-based employees: left blank; you can enter a rate.

Encashment rules:

• You can encash time off only if:
  • Balance is positive, and
  • Policy allows encashment.
• If a leave type has:
  • Zero or negative balance, or
  • Encashment disabled in policy
    Then:
  • The encash quantity and rate fields are disabled.

The encashed amount is mapped to a Paid Time Off earning in the finalisation step.

Overtime

Shows overtime hours from Workforce.

Columns include:

• Component name
• OT policy
• Hours
• Amount
• Action (Pay / Void)

What you can do:

• Override hours; amount recalculates.
• Choose whether to Pay or Void each OT line.

Changes here do not update hours back in Workforce.

Shift differential

Similar to overtime, but for shift allowances.

Columns include:

• Component name
• Shift allowance policy
• Hours
• Amount
• Action (Pay / Void)

You can override hours and decide whether to Pay or Void. Changes do not sync back to Workforce.

Regular Rate of Pay (RROP) / Weighted OT

If the employee has weighted overtime or double-weighted overtime configured (i.e. overtime based on Regular Rate of Pay):

• When you edit overtime or shift differential hours:
  • The rate and amount are recalculated based on updated RROP.
• When you edit regular or overtime hours, the RROP changes:
  • Amounts may not update immediately as you type.
  • They refresh once you click Save.

Keka shows an info icon next to such components explaining:

Expense reimbursements

This section covers:

• Expense claims
• Advance requests
• Advance settlements

Only items that are not fully processed in payroll are shown.

Expense claims

Shows expense claims that:

• Are pending approval, or
• Have been approved but not yet processed in payroll

Columns include:

• Claim number
• Name
• Status (Pending / Approved)
• Amount
• Action

Actions:

• Pay – Include the claim in this F&F settlement.
• Void – Do not pay this claim.
• Mark as paid outside payroll – Exclude it from payroll and enter paid date.

Advance requests

Shows advance requests that:

• Are pending approval, or
• Have been approved but not yet processed in payroll

Columns and actions are the same as expense claims:

• Claim number, name, status, amount
• Actions:
  • Pay
  • Void
  • Mark as paid outside payroll and add date

Advance settlements

Shows advances whose settlements are still pending, for example:

• Pending receipt submission
• Pending approval
• Approved but not yet paid or recovered

Columns include:

• Claim number
• Advance name
• Status:
  • Pending receipt submission
  • Pending approval
  • Approved
• Due date (for pending receipts)
• Action

Actions by status:

Asset damage charges

Use this section to recover costs for damaged or unreturned company assets.

You’ll see fields similar to existing asset damage workflows:

• Asset name and ID
• Amount
• Recovered by
• Added on
• Condition at recovery
• Collection method
• Description and attachments

These entries are mapped to payroll as follows:

• Employees
  • Mapped to a post-tax deduction (e.g. Asset Damage Deduction).
• Contractors
  • Mapped as a negative reimbursement (e.g. Asset Damage Adjustment).

You can add, review, and edit these charges in this section. They flow into the final pay calculation.