Understanding Fixed Compensation for Contractors in Keka

Introduction

Keka now supports an enhanced Fixed Compensation model for contractors. This model allows organizations to pay contractors a fixed amount per pay cycle or define payments where the amount varies every payroll cycle.

This flexibility supports common contractor payment structures such as lump-sum payments, milestone-based payments, or negotiated cycle-based payouts, while ensuring payroll processes remain accurate and streamlined.

With this model, contractor compensation is independent of attendance or working hours, making it easier to manage contractors who are not paid hourly.

Fixed Compensation Types for Contractors

The new model introduces two ways to configure contractor compensation.

Fixed Amount Every Pay Cycle

Contractors receive a predefined fixed payment during every payroll cycle.

Example:

The amount remains consistent across payroll runs unless compensation is revised.

Fixed Compensation with Varying Amount

Some contractors are paid different amounts in each payroll cycle, depending on work delivered, milestones, or negotiated payouts.

In this scenario:

• No predefined amount is stored in compensation.

• The payroll admin specifies the payable amount during each payroll run.

Example:

This option allows organizations to handle ad-hoc or milestone-based payments more efficiently.

Compensation Configuration Changes

When adding compensation for contractors, a new compensation type called "Fixed" is available.

Key Changes

• Contractors can now select Fixed as a compensation type.

• The Per Annum option is no longer available for contractors.

• Admins can mark the payment as Amount Varying Each Payroll.

If Amount Varying Each Payroll = Yes:

• No amount needs to be defined in compensation.

• Payroll admins will specify the amount during payroll runs.

If Amount Varying Each Payroll = No:

• A fixed amount must be defined during compensation setup.

Payroll Processing for Fixed Compensation

Run Payroll Behavior

Contractors with fixed compensation do not require working hours or attendance records.

Because of this:

• Payroll will not show errors related to missing attendance.

• Payments will be based purely on the configured fixed amount.

• If a contractor has varying fixed compensation and no amount is entered during payroll:

• A warning will appear in the Needs Attention section.

Off-Cycle Payroll

During off-cycle payroll, the following behavior applies:

• The Fixed earning component will be available when adding earnings.

• If selected, the Amount field will be blank and must be filled by the admin.

The amount cannot be 0 if the contractor has no other earnings.

Exit Settlement

When processing contractor exit settlements:

If a contractor has varying fixed compensation and no amount is defined, a message will appear in Needs Attention.

Final Pay Summary

For contractors with fixed compensation:

• The Regular Earnings table will display an editable amount field.

• Admins can modify the amount during the Pay Items step.

Other earnings, reimbursements, and adjustments will function normally.

Mobile Experience

The mobile application will support contractor fixed compensation data.

Employees will be able to view:

• Compensation details for both fixed and varying contractors in the My Pay screen

  

• Compensation revisions in the Pay Revisions screen

Mobile APIs will be updated to support these changes.