Creating and configuring a new pay group

Modified on Thu, 28 Mar at 2:34 PM

Available for plans : Foundation, Growth, Strength.

Pay Groups are basic building blocks for the payroll system in Keka. Each pay group shares a set of configurations. When the employees in the pay group get paid is perhaps the most fundamental of these configurations.

You can set up different pay groups with different salary structures, components, and other settings that will dictate how the employees in the pay group get paid and how their tax filings are managed.

Let us look at how you can create and configure a new pay group in your organization.

Navigate to Payroll (1) and select Settings (2).

Go to the Pay Groups (3) tab to create and manage the various pay groups in your organization.

To create a new Pay Group, click + Add Pay Group.

Enter the details pertaining to the new pay group on the Add Pay Group window that opens up.

If you have multiple legal entities set up, select the Legal Entity to which the pay group belongs.

Enter a Pay Group Name as well as a Description if needed.

You can also select the pay frequency for the pay group.

Once you have added all the details, click on Add Pay Group to create the new pay group.

On the Pay Groups page, you can see the details of the new pay group that you’ve added. You have to also set up the new pay group with specific details regarding the pay group.

Click on the three dots corresponding to any pay group to open the various options.

Editing the pay group detail

To edit the details of the pay group, select Edit Pay Group.

This will open the Edit Pay Group window where you can make changes to the Pay Group Name, Description, the Legal Entity it belongs to as well as the Pay Frequency. If you want to change any of these values, make those changes and click on Update Pay Group.

Setting the pay group as default

You can also set a default pay group for the new employees you are adding to the organization. To set a pay group as default, click on the three dots corresponding to that pay group and select Set as Default from the drop-down.

Deleting a pay group

To delete a pay group, from the drop-down menu corresponding to the pay group, select Delete Pay Group.

You can only delete a pay group when it does not have any employees assigned

In the Delete Pay Group window that opens up, click Delete to confirm the deletion of the pay group.

Configuring the various pay group settings

Pay cycles determine the cut-off dates for attendance tracking and look at other essential aspects like monthly paydays,

remuneration types, etc.

The pay cycle is the first aspect of the pay group that you will be prompted to configure when first creating a group.

To set up the Pay Cycle for a new Pay Group, navigate to Payroll (1) from the left pane. Go to the Settings tab (2) and in the Pay Groups tab (2), find the new Pay Group you have created and click Setup Now (4).

There are various options in the next window which will configure the pay group to align with how you want to use it. To start the configuration, click Set Payroll Cycle Dates.

On the Pay Period Settings window, select the month from which you want to use the Keka HR Portal for processing payroll in your organization.

The next field to select would be the Pay Period End Date for the month. There are multiple options to choose from depending on when you pay your employees. You will need almost 4-5 days from the pay period end date to the salary payout date to ensure that you have enough time to reconcile the salary data and ensure accuracy.

If you choose 27th March as the Pay Period End Date, the pay cycle for the pay group will be from the 28th of the month to the 27th of the next month. This means that the attendance details of the employees will be considered for this period only for calculations.

Once you have entered the required details, click Save.

This completes the configuration of pay cycles.

The next step in the process is to enable employees' contributions. Click on Enable Employees' Contributions.

On the Contributions window, you can enable or disable statutory contributions as you wish.

Click Save once you have enabled the necessary contributions.

The next thing to configure will be the Salary Structures of the employees.

To start configuring the salary structures for the employees in the new pay group, click on Set Salary Structure Of Employees.

In the Salary Structure Configuration window, you will see the various default configurations that are pre-defined on the Keka HR portal. You can add custom salary structures and add new components to these salary structures later.

If you want to edit the default salary structures, select the salary structure from the Salary Ranges column. Now also select the salary component you want to edit. In the right pane, click on the Edit icon in the Formula for Value/Fixed Value field.

In the Update Value window, you can either add a fixed value for a component or you could also add a formula for the calculation of the value.

If you add a fixed value, the monthly value for that component will be the value that you entered.

You can also add a formula for the calculation of the value. This can be based on the various salary components that are available to you to determine the base for the formula. If you want the value to be say 10% of basic, enter the formula as [BASIC]*0.1

You can also choose other components to calculate the value such as CTC, Gross Salary, HRA, PF contributions of both the employee and the employer, and more.

Once you have entered the value or the formula for the component, click Update.

The final configuration that you have to do to begin using the new pay group you have added is the Set PT & Tax Declaration Cut-off Dates.

Click on Set PT & Tax Declaration Cut-off Dates.

In the Set PT & Tax Declaration Cut-off Dates window, you can enable or disable professional tax for the pay group. Enable professional tax if it is applicable to your organization depending on the various regulations governing professional tax in the states you operate in.

The various income tax settings are to be configured next. You can choose when the employee can make IT declarations every month and add various details such as investment proofs that can impact the tax calculations. You can set a monthly cut-off date for every month until the yearly cut-off date before which the employees can make IT declarations. Post this date, the declarations made will not be considered for the TDS calculations for that month.

The yearly cut-off date is the final date before which all Income tax declarations for the year have to be submitted. Your employees will not be able to submit IT declarations for the current financial year post this cut-off date.

Under the question How often can employees update their IT Declarations? enter the date before which every employee can make IT Declarations for that month.

You can also set the cut-off date for the financial year on this window.

In the IT Declaration Proof Submission section, you can select the month and day before which all the IT declaration proofs should be submitted. After this cut-off date, the employees may not get the option to upload the proof documents or if they do, it won’t be considered for tax calculations.

Once you have entered the necessary details, click Save.

Now you have finished all the basic setups for the pay group you have newly created.

Click on Mark as Complete on the Payroll Configuration window to finish the initial setup.

You can now see the various tabs on the Payroll Configuration window. Going through these tabs will help you see the various settings of the pay group. You can also edit these settings to make changes to the pay group.

Any questions about creating and configuring pay groups? Reach out to us for help!