Update TRU for a Worker
When a worker moves to a new legal employer, they may also require a new TRU. In this scenario, the global transfer process creates a new assignment, which can be associated to the new TRU.
In other circumstances, you need to update the TRU of a worker although they still retain their legal employer (and payroll statutory unit). For example, when the worker moves to another department within your organization. In this type of scenario, you can either update the TRU on the worker's original assignment or create a new assignment.
Scenario
Vision Corporation operates supermarket and hardware stores in a Canadian city.
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Vision Corporation is a single legal entity responsible for employing and paying workers across all their stores.
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The supermarket and hardware stores are classified differently for tax and social insurance reporting purposes. Vision Corporation therefore has two TRU's: Vision Supermarket and Vision Hardware.
Yan has worked at the supermarket store for several years, and has now secured a manager role at her local hardware store. With this promotion, update Yan's TRU from Vision Supermarket to Vision Hardware.
You must note that Yan transfers to the hardware store payroll on 10-May-2020. She will continue to be paid on a semi-monthly payroll.
Transfer TRU - New Assignment
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You start by terminating Yan's original assignment on 09-May-2020. This will evoke standard payroll termination processing including the ending of element entries.
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Then create a new assignment effective 10-May-2020 and associate it with Vision Hardware.
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Enter her earnings and deductions as required.
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Run the semi-monthly payroll for the period ending 15-May-2020.
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The application performs two payroll calculations:
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Original Assignment: Earnings for the period 01-May-2020 to 09-May-2020 are taxed and reported against Vision Supermarkets.
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New Assignment: Earnings for the period 10-May-2020 to 15-May-2020 are taxed and reported against Vision Hardware.
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Transfer TRU - Retain Assignment
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Navigate to Yan's statutory deduction card. Set the effective date to 10-May-2020 and create a new tax card record for Vision Hardware.
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Update her earnings and deductions as required.
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Run the semi-monthly payroll for the period ending 15-May-2020.
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All of Yan's earnings for the payroll period 01-May-2020 to 15-May-2020 are taxed and reported against Vision Hardware. This is the active TRU on the process date of the payroll run.
Retroactive Earnings
Let's assume Yan also has a backdated salary increase from 01-April-2020 which is paid on 15-May-2020. The retroactive salary payment is taxed against Vision Supermarket. As described above, the other payments in May are taxed against Vision Hardware.
Taxation of Retroactive Earnings after TRU Transfers
When processing a TRU transfer for the same assignment, you have the option to tax retroactive earnings based on either the source or the target TRU. The options are:
- Y or blank: Date Earned - Retroactive earnings are taxed based on the source (or original) TRU, this is the default behavior.
- N: Date Paid - Retroactive earnings are taxed based on the target (or current) TRU.
Negative retroactive entries are processed in the target (or current) TRU after a TRU transfer occurs. These negative entries aren’t ignored in the payroll process because of the association to the source (or original) TRU. For example, in the case where a TRU transfer occurs for a single assignment, and the TRU Rule for Retro Entries parameter has been set to ‘N’, the negative retroactive entries are processed in the target (current) TRU, and employees are not overpaid.
Changing the Default Behavior
To change the default behavior to tax retroactive earnings based on the date paid, and use the target TRU, add the Process Configuration Group parameter TRU Rule for Retro Entries. By default, the action parameter TRU Rule for Retro Entries does not exist in the Action Parameter Group. If you want to override the default behavior, you must add this new parameter with a value of N.
Use the Payroll Process Configuration page, under My Client Groups, to add the parameter and override the value, if required.
Consider the following while using this feature:
- Once this rule is set, do not change it for each payroll run.
- You don’t have to do anything unless you want to change the current behavior.
- This feature does not support multiple assignment scenarios. It only supports TRU transfers of the same assignment.