1. Human Capital Management Fundamentals Implementation Guide
  2. (USA) Understanding State Common Paymaster

(USA) Understanding State Common Paymaster

When an employee changes companies within a common paymaster group, companies need to track taxes such as State Unemployment Insurance (SUI) and State Disability Insurance (SDI), which have statutory limits. When companies track these tax accumulations, they can pay only appropriate taxes and avoid extra taxation that can apply if tax accumulation starts over.

Note: Rules vary among states. Some states do not recognize common paymaster, while others implement it using different requirements. Users need to be familiar with these rules for each state in which they do business.

You can set up common paymaster for companies in the United States using either of these approaches:

  • Companies share the same tax ID for each allowable tax type.

  • Companies with different tax IDs use a paymaster group code (UDC 06/PM).

To share the same tax ID, enter a common tax ID number for each combination of work tax area and tax type. These entries are required for each state.

Required tax types for SUI limits are:

  • G: State unemployment (employee portion).

  • GM: State miscellaneous (employee portion).

  • G1: State miscellaneous 1 (employee portion).

  • G2: State miscellaneous 2 (employee portion).

  • H: state unemployment (employer portion).

  • HM: State miscellaneous (employer portion).

  • H1: State miscellaneous 1 (employer portion).

  • H2: State miscellaneous 2 (employer portion).

Required tax types for SDI limits are:

  • I: State disability (employee portion).

  • J: State disability (employer portion).

To set up Common Paymaster using the CP (common paymaster) and PM GR (paymaster group) fields, set the CP field to Y and the PM GR field to the user-defined code such as 01 for each work tax area and tax type.

Note: You must also set up a user-defined code such as 01 in UDC 06/PM. You use this code to group multiple companies together.

You can implement a shortcut to set up additional companies. After setting up common paymaster for the first company, you can copy the first company setup and then assign a new company number.