Editing pay cycle for a pay group

Available for plans : Foundation, Growth, Strength.

The pay cycle for a pay group defines essential factors that determine when and how the salary data is calculated.  

Let’s take a look at how you can edit and configure the pay cycle details of any pay group.  

Start from the Payroll tab (1) on the left pane. Select the Settings tab (2) and go to the Pay Groups tab (3). Here, you will see the various pay groups you have configured if you have more than one set up in your organization’s Keka portal.  

Select the pay group you want to configure and click on the Configure icon (4). 

On the Pay Group Configuration screen, select the Pay Cycle tab. Here you can see the various pay cycle settings that are currently active for the pay group. Click on the three dots on this screen and select Update Settings. 

On the Update Payroll Cycle Settings, you can find a host of configurations that you can tweak to align the settings with your payroll process. 

Here’s a detailed look at these components. 

Payroll Cycle Settings 

Here, you can set up the month from which you want to start using Keka Payroll. If the pay group you are configuring is new and you’ve not run payroll for that group yet, you can change both the month from which you want to start using Keka payroll and the payroll cycle end date.  

If you have been using that pay group to run payroll before, you can only edit the payroll cycle end date for each month.  

Editing the pay cycle for a new pay group 

To edit payroll cycle settings for a new pay group, you can directly enter values into the fields From which month you wish to start using Keka payroll and Choose pay period end date.  

One of the other related settings to change would be the Attendance Cut-Off Date. The attendance cut-off date determines the date till which the attendance tracking data of your employees is taken into consideration for the salary calculations.  

You can set the cut-off day for attendance to be the same as the pay cycle end date. In this case, the calculations are pretty straightforward, and all the days for which the employees are eligible for payment will be included in the salary calculations. Loss of pay (LOP) days if any will be discounted. 

In case the attendance cut-off date is before the pay cycle end date, then the period from the last cut-off date to the next one will be considered in salary calculations. In case there are LOP days within this period, the pay for those days will be deducted.  

In case the employee has LOPs after the attendance cut-off dates but before the pay cycle end date, the employee will receive payment for all the days in the month for the current month but the LOPs will be considered while calculating the salary for the subsequent month.  

To take an example, say the pay cycle end date is set as the 31st of that month and the attendance cut-off date is set as the 27th of that month.  

If there are LOP days before the 27th, the employee’s pay will be affected and the pay for those days will be deducted. Say the employee has LOPs on the 28th and 29th of that month. In this case, the employee will receive full pay for the current month while they will lose the pay for 2 days in the subsequent month as Recovery Arrears. 

Focus on the checkbox Employees' attendance cut-off date is not same as pay period end date.  

If your attendance cut-off date is the same as the pay cycle end date, leave this checkbox unselected. If you want to set a different attendance cut-off date, select the checkbox. This will give you an additional option to select the attendance cut-off date for each month. Select the date you want to set in this field.  

Editing the pay cycle for an existing pay group that’s in use 

To edit the pay cycle settings for a pay group you have been using, on the Update Payroll Cycle Settings window, click on Change End Date. 

In the Change Pay and Attendance End Date window, edit the payroll cycle end date as per your need. You can also see the new pay cycles including the changed dates in this window.  

You also get the option to choose if the attendance cut-off dates are different from the pay cycle end date. Select the checkbox Employees' attendance cut-off date is not same as pay period end date and select the date you want to set as the attendance cut-off date.  

Payable days calculation 

The next section in pay cycle settings is the payable days calculation. This will have an impact on the LOP calculations for employees.  

Paydays in a month – This field is used to set the number of days in a month for which the employees are paid.  You can select actual days in a month or to any fixed value from 20-31 days.  

Weekly offs are paid – Selecting this would mean that the weekly off days would also be considered paydays. 

Holidays are paid – Selecting this will include holidays in a month as paid days.  

These selections have a bearing on how the LOP amount for an employee is calculated. 

Let’s consider the case of an employee with ₹ 30,000/- per month as the salary. 

If you consider the case where you’ve selected the actual number of days as the number of payable days, and the month has 30 days, the pay per day would be 30,000/30 =  ₹1000/-. 

In case the employee has a LOP, the total loss of pay for the employee would be ₹1000. In case the month has 31 days, the pay per day would be 30,000/31 = ₹ 967.74 per day which would be the loss of pay in case the employee has unpaid leave during the month.  

If you choose to have weekly offs as unpaid and consider 8 weekly offs a month, the effective number of payable days for a month with 30 days would be 30-8 = 22 days. In this case, the pay per day would be calculated as ₹ 30,000/22 = ₹ 1364/-. So an employee would lose ₹1364 per LOP day in this case as opposed to ₹ 1000/- if you consider weekly offs as paid.  

On the Update Payroll Cycle Settings window, make the necessary changes to the fields under the payable days calculation settings including the number of paydays in the month and if the weekly offs and holidays are considered to be paid days. 

Remuneration type 

The last section that you need to focus on is the remuneration type. By default, the monthly remuneration option will be selected for most pay groups. You can also choose to enable daily remuneration for the pay group if you have employees who are being paid on a daily basis.  

If you choose to enable daily remuneration settings, you will need to create a separate salary structure for daily remunerations and assign it to the employees who are on daily pay.  

Select the Daily checkbox in case you want to enable daily payments for the pay group.  

After you’ve made the necessary selections, click Update to finish updating the pay cycle settings for the pay group.  

If you’ve made changes to the Payroll Cycle Settings such as the Pay Period End Date or the month from which you want to use Keka payroll, you will be asked to confirm the change as these changes will impact the payroll processing.  

Type CONFIRM in the textbox in the Confirm Changes in Payroll Cycle Settings window and click on Yes, Update the Settings.  

These are the steps through which you can edit and reconfigure the pay cycle settings for any pay group.  
 
More questions about pay cycle settings? Get in touch and we will be happy to help!