What is Mid-Cycle Compensation Revision?

When an employee's compensation changes during an active pay period, Keka automatically calculates the employee's pay based on the compensation effective date.

The pay period is split into two segments:

• Segment A: Pay calculated using the previous compensation rate up to the day before the effective date.
• Segment B: Pay calculated using the revised compensation rate from the effective date onward.

Both segments are included in the same payroll run and paycheck. This eliminates the need to manually calculate the revised amount or create a separate off-cycle payroll specifically for the compensation change.

Who can use this feature?

Admins who have access to Revise Pay and Run Payroll can use this feature for eligible employees and contractors.

For contractors paid per pay period, compensation changes are applied from the selected pay period and are not prorated.

Navigation

Payroll → Run Payroll → Revise Pay

How to revise compensation during a pay period

• Select the employee whose compensation needs to be revised.
• In the compensation revision screen, select Custom date.
• Select the date from which the revised compensation should take effect.
• Review the compensation details and save the revision.

If the selected date falls within the current pay period, Keka displays an informational message showing the dates for which the existing and revised compensation will apply.

For example, if the compensation revision is effective from January 15:

• The existing compensation applies until January 14.
• The revised compensation applies from January 15 onward.

How is the revision reflected in payroll?

For eligible employees and contractors, Keka automatically creates two earning segments during payroll processing:

• The first segment uses the previous compensation rate.
• The second segment uses the revised compensation rate.

The amounts are calculated automatically based on the applicable compensation type and available payroll or attendance data.

For salaried employees, Keka calculates the split based on the applicable days in the pay period.

For hourly, piece-rate, and eligible contractor compensation types, the applicable hours or units are considered for each segment.

Mid-Cycle Revision in Off-Cycle Payroll

Mid-cycle compensation revisions are also supported in off-cycle payroll.

When you add an applicable regular earning component for an employee whose compensation revision is effective during the off-cycle pay period, Keka automatically splits the earning into the two applicable segments.

The generated segments cannot be deleted. You can edit the applicable hours or amount where permitted.

Other earning components such as bonuses, allowances, and reimbursements continue to work as usual and are not split because of the compensation revision.

Contractors Paid Per Pay Period

For contractors whose compensation type is Per Pay Period, the compensation revision is not prorated.

Instead:

• Select the required pay period.
• The revised compensation applies from that pay period.
• The current pay period continues to use the existing compensation.

Paystub

When a revised compensation rate is applied for part of a pay period, the revised-rate earning is marked with a on the paystub.

The paystub displays the following note:

Indicates revised pay rate applied for part of this pay period.

This helps employees identify that their compensation changed during the pay period.

Important Notes

• A compensation revision that has already been processed cannot be applied retroactively.
• Only one future-dated compensation revision can exist for a worker at a time.
• If a compensation revision is saved after a payroll run has already been opened, the payroll must be reloaded to include the revision.
• If attendance or hours data required for the calculation is unavailable, you may need to enter the applicable hours before proceeding with payroll.
• Compensation revisions do not split bonuses, allowances, reimbursements, or other non-regular earning components.