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TABLE OF CONTENTS

• Introduction
• Adding a Perk
• Configure tax implication for perks
• Showing the Monetary Value of Perks
• Configuring the Value of the Perk
• Proration of Perk
• Editing a Perk
• Deleting a Perk

Introduction

In today's competitive job market, most organizations rely on offering attractive perks for retaining and attracting top talent. Understanding this, Keka HR provides a comprehensive solution for adding and managing a variety of employee perks seamlessly. This support article serves as a guide on how to efficiently use Keka to implement, track, and manage perks for employees.

Here are some common perks that organizations add to their compensation packages. 

• Company Car or Transportation Benefits
• Meal Card or Passes
• Skill Development Reimbursement

Let us look at how you can add and manage perks on the Keka HR portal - 

Adding a Perk

To add and manage perks on the portal, navigate to Payroll (1) and select the Perks (2) tab. 

Ensure that you're on the Perks (3) sub-tab to view the various perks you've created on the system. 

To add a new perk, click on Add Perk, at the right hand side, on the Perks window.

On the Add Perquisite window, you can enter the details for the new perk and also configure the value of the perk. 

Enter the Name of the Perquisite as well as a Description. You can also choose if the perk is a recurring amount that is being paid out every pay cycle or is it an ad-hoc perk that is paid out as and when required. Select the checkbox indicated if it is an ad-hoc perk. 

You can also choose a Perquisite Category from the list of pre-configured categories using the drop-down.  

Configure tax implication for perks

The next set of options determine the tax implications of the perk. You can choose if the perk is taxable or not as per the income tax regulations. Select Yes if it is taxable and No if it is not a taxable perk. 

If it is a taxable perquisite, you can choose whether the tax is borne by the organization or the employee. 

Select Employer Bears the Income Tax of the Employee if the tax for the perk is borne by the organization. If it is being borne by the employee, select Employee Incurs the Tax. 

If the employer is bearing the tax for the perquisite, you can choose whether it needs to be included in the income tax calculation of the employee and the tax is to be excluded under section 192(1A). Select the checkbox under the Employer Bears the Income Tax of the Employee option to enable this. 

Showing the Monetary Value of Perks

The next option determines whether the employee can see the monetary value of the perquisite. You can choose to hide the monetary value of the perquisite if it is non-taxable or when it is taxable but the employer bears the income tax incurred due to the benefit and it is not included in the income tax calculation of the employee. 

For the question Do you want to show monetary value of perquisite to the employee?, select Yes to display the monetary value of the perk to the employee. Select No if you want the monetary value to be hidden. 

Configuring the Value of the Perk

Finally, you also have to define a value for the prerequisite under the section How is Perquisite Value Calculated? You can define a fixed value for the perk across all employees or you could use a formula to determine the value based on the employee's pay structure. You can also choose to not define a value or a formula and have the value manually assigned at the employee level. 

To assign a fixed value for the perk, select the option Perquisite Value is a fixed amount for all employees. This will display 2 more fields for you where you can enter the fixed value of the perk and the taxable amount. The taxable amount option will only be available if this is a taxable perk. 

If you choose to define the value of the perquisite as per the formula, select the option Perquisite Value is formula based value, for all employees.

You will then be prompted to enter the formula to calculate the overall value of the component and the taxable value. 

To add a formula for the calculation, click on the Add icon. 

On the Add Perquisite Calculation Amount window, you can enter the formula for the perquisite value and the taxable amount. Select a component from the Available Components list on the left. 

Click Add once you've entered the formula.

Finally, you can also choose to have the value of the perquisite to be individually defined at the employee level. Select the option Perquisite Value is different for each employee, and is defined at each employee level. 

Proration of Perk

Proration of perks is essential as it paves the way for a more tailored and efficient benefits system. This feature will ensure that perk benefit value aligns precisely with the number of days an employee has worked for in the organisation.

You can enable the option of proration while creating or editing a perk. Enable the option of Prorate this perk as per actual payable days in a month to activate proration for the perk amount.

Note:

- If the setting is updated after assigning and processing a perk for an employee, the updated setting will be applied in the months which are not yet processed.

- If you have existing perks which have already been assigned to employees, the setting of proration can still be turned on when you edit the existing perk. The perk value will start getting prorated from the pay cycle which is not processed. The perk value which has already been processed in the past months will not be updated.

By enabling proration, the perk value will be adjusted according to the number of payable days i.e. if the employee has Loss of Pay days in a month or if an employee joins/exits in the middle of the month, the value of perk will be adjusted according to the actual payable days.

According to the adjusted perk values, the taxable value will be auto adjusted in an employee's income tax computation. 

If you want to understand how perk amount will be prorated in various scenarios like employee joining or exiting in the middle of the month or employee having Loss of Pay days in a month, click on View Examples. 

Note: The option of proration is not available for formula based perks as these perks are prorated by default on the basis of the earned value of the components added in the formula. 

Enter the details of the perk as you wish and once you're done, click Save and Continue. 

Editing a Perk

On the Perks window, you can edit or delete the perks you've added to the system. To edit a perk, click on the Edit icon corresponding to the perk you would like to edit. 

Make the changes to the perk in the Edit Perquisite window and then click Update & Continue.

Deleting a Perk

To delete a perk, click on the Delete icon corresponding to the perk. 

Note - You cannot delete a perk that is currently assigned to employees. Remove the assignments first before you attempt to delete the perk.

These are the steps to add, edit and delete perks.

We hope you now have a good understanding of how to manage perks on Keka. In case of further queries, please feel free to reach out to our product experts today!

Related Links:

Assigning perks to employees