Define the State and Local Tax Jurisdiction Through Fast Formula

For this example, you're defining a new state employer liability for the New Jersey Employer Payroll Expense tax. Because you never anticipate using this configuration for any other state, you're setting the state through fast formulas.

You're assuming a New Jersey Employer Payroll Expense tax of 1 percent of gross earnings for the calculation, with payroll results configured for periodic and quarterly archival and reporting.

These are the high-level steps.

1. Define and configure the elements.

2. Configure the fast formulas.

3. Configure the balances.

4. Create element entries.

5. Validate tax calculations.

6. Extract the payroll data.

Define and Configure the Elements

To define the New Jersey Employer Payroll Expense tax, perform the following element operations.

1. Define the state tax base element, New Jersey Payroll Tax.

2. Configure the element's input values.

3. Configure the state tax results element, New Jersey Payroll Tax Results.

Defining the State Tax Element

To define the base element:

1. Start the Elements task.

2. Create an Employer Taxes element with the following settings.

   Field name	What you enter
   Legislative Data Group	Your US legislative data group
   Name	New Jersey Payroll Tax
   Primary Classification	Employer Taxes
   Secondary Classification	Leave blank
   Employment Level	Payroll relationship level
   Calculation Rule	Percentage

3. Specify the other required fields as needed, and submit.

Configuring the Element Input Values

After you define the element, you define a State input value that identifies New Jersey as the jurisdiction.

1. On the Element Summary page, click Input Values.

2. Click Actions and then Create Input Values.

3. In Create Input Value, specify these values.

   Field name	What you enter
   Name	State
   Displayed	Selected
   Allow User Entry	Selected
   Create a Database Item	Selected
   Unit of Measure	Integer
   Display Sequence	1

4. In Default Entry Values and Validation, set this value.

   Field	What you enter
   Reference	State

5. In Default Value, set these values.

   Field name	What you enter
   Default	NJ
   Apply Default at Run Time	Don't select

6. Click Save.

7. Edit the Percentage input value to set the default to 1.

8. Review all other input values.

   Make sure none of them use a display sequence of 1. If they do, renumber them appropriately.

   Don't create element eligibility until after you have configured the input values.

9. Create the element eligibility.

Configuring the State Tax Results Element

When you defined the New Jersey Payroll Tax element, the template automatically created a results element, New Jersey Payroll Tax Results. Make these configuration changes to the results element.

1. Using the Elements task, search for and open for editing the New Jersey Payroll Tax Results element.

2. Set the priority to 6255.

   This ensures the payroll process:

   • Runs the results element after the base element

   • Makes the results element available for selection when setting the formula results (see the next section)

3. Create a State input value with the same settings as the base element.

4. Review all other input values.

   Make sure none of them use a display sequence of 1. If they do, renumber them appropriately.

5. Create a Gross Earnings input value with the following values.

   Field name	What you enter
   Displayed	Selected
   Allow User Entry	Selected
   Create Database Item	Selected
   Unit of Measure	Money

Configure the Fast Formulas

When you define the New Jersey Payroll Tax base element, the template creates these fast formulas.

• New Jersey Payroll Tax_CHG_DEDN

• New Jersey Payroll Tax_CHG_DEDN_CALCULATOR

Edit these fast formulas to default the jurisdiction for the state of New Jersey.

1. Use the Fast Formula task to modify the New Jersey Payroll Tax_CHG_DEDN formula.

   Edit this formula to make these changes.

   1. Locate the INPUTS are Amount section, and add a ,State(number) entry after it.

   2. Locate the call_formula( 'GLB_DEDN_CHG_BASE' statement, and insert this immediately before it.

      ee_id2 = ee_id ||'State'
      IF (WSA_EXISTS(ee_id2,'TEXT_TEXT')) THEN
        (  ee_array = WSA_GET(ee_id2, EMPTY_TEXT_TEXT) )
        ELSE
        ( dummy = PAY_INTERNAL_LOG_WRITE('[NEW_JERSEY_PAYROLL_TAX_CHG_DEDN] - ARRAY NOT FOUND : ' || ee_id2))
        IF (State WAS NOT DEFAULTED) THEN
        (  ee_array['State'] = to_char(State)
         dummy = PAY_INTERNAL_LOG_WRITE('[NEW_JERSEY_PAYROLL_TAX_CHG_DEDN] - 999 : ' || to_char(State))
          wsa_set(ee_id2, ee_array))

   3. Locate the IF error_mesg section, and modify it to include a state reference:

      ( Return error_mesg, state )

   4. Submit and compile the formula.

2. Modify the New Jersey Payroll Tax_CHG_DEDN_CALCULATOR formula.

   Edit this formula to make these changes.

   1. At the end of the declaration section, add this line.

      Default for NEW_JERSEY_PAYROLL_TAX_STATE_REL_ENTRY_VALUE is 31

   2. After the INPUTS section, add this line.

      State = NEW_JERSEY_PAYROLL_TAX_STATE_REL_ENTRY_VALUE

   3. Search for the call_formula( 'GLB_DEDN_CHG_CALC' section. Locate the following lines at the end of that section.

        stop_entry
        )

      After these lines, insert this.

      ee_id2 = ee_id||'State'
      IF (WSA_EXISTS(ee_id2,'TEXT_TEXT')) THEN
        (  ee_array = WSA_GET(ee_id2, EMPTY_TEXT_TEXT)
        dummy = PAY_INTERNAL_LOG_WRITE('[NEW_JERSEY_PAYROLL_TAX_CHG_DEDN_CALCULATOR] 999 = '|| ee_id2)
          IF ee_array.EXISTS('State') THEN
        ( state = to_number(ee_array['State'] )
          dummy = PAY_INTERNAL_LOG_WRITE('[NEW_JERSEY_PAYROLL_TAX_CHG_DEDN_CALCULATOR] = '|| to_char(state)) )
      )

   4. Search for the RETURN statements that include dedn_amt, and add this at the end of each.

      eligible_compensation,
      state

   5. Submit, and compile the formula.

3. Return to the Elements task.

4. Make these changes to the New Jersey Payroll Tax Calculator element.

   1. Select Status Processing Rules, and select the current rule.

   2. Create a formula result rule to pass ELIGIBLE_COMPENSATION as an indirect result to the Gross Earnings input value of the Results element.

   3. Create a formula result rule to pass STATE as an indirect result to the State input value of the Results element.

Configure the Balances

After you configure the fast formulas, you define the balances necessary for this tax.

1. Define the state tax balances.

2. Implement the balances at the enterprise level.

Defining State Tax Balances

Define and configure the required balances.

1. Use the Balance Definitions task to define a Reduced Subject Wages balance.

   Field name	What you enter
   Name	New Jersey Payroll Tax Reduced Subject Wages
   Balance Category	Employer Tax Wages
   Unit of Measure	Money
   Balance Dimensions	Because this is a state-level tax, search for and add the following. Relationship Tax Unit,State Run Relationship Tax Unit,State Year to Date Relationship Tax Unit, Area1 Payslip Relationship Tax Unit,State Quarter to Date
   Balance Feeds by Element	New Jersey Payroll Tax Results
   Input Value	Gross Earnings

2. Define a Taxable Wages balance.

   Field name	What you enter
   Name	New Jersey Payroll Tax Taxable Wages
   Balance Category	Employer Tax Wages
   Unit of Measure	Money
   Balance Dimensions	Because this is a state-level tax, search for and add the following. Relationship Tax Unit,State Run Relationship Tax Unit,State Year to Date Relationship Tax Unit, Area1 Payslip Relationship Tax Unit,State Quarter to Date
   Balance Feeds by Element	New Jersey Payroll Tax Results
   Input Value	Gross Earnings

3. Define a Gross Wages balance.

   Field name	What you enter
   Name	New Jersey Payroll Tax Gross Wages
   Balance Category	Employer Tax Wages
   Unit of Measure	Money
   Balance Dimensions	Because this is a state-level tax, search for and add the following. Relationship Tax Unit,State Run Relationship Tax Unit,State Year to Date Relationship Tax Unit, Area1 Payslip Relationship Tax Unit,State Quarter to Date
   Balance Feeds by Element	New Jersey Payroll Tax Results
   Input Value	Gross Earnings

4. Configure the predefined New Jersey Payroll Tax Eligible Compensation balance.

   Make these changes.

   1. Add these balance classifications as feeds.

      • Regular

      • Supplemental Earnings

      • Imputed Earnings

   2. Add these balance dimensions.

      • Relationship Tax Unit,State Run

      • Relationship Tax Unit,State Year to Date

      • Relationship Tax Unit, Area1 Payslip

      • Relationship Tax Unit,State Quarter to Date

5. Add the same balance dimensions to the predefined New Jersey Payroll Tax balance.

Implementing the Balances at the Enterprise Level

Perform these steps to implement the balances you defined in the previous section. This makes them available for payroll archival and reporting.

1. Start the Manage Enterprise HCM Information task.

2. Add a row to the US Balance Definition table, and enter these values.

   Field name	What you enter
   Legislative Data Group	Your US legislative data group
   Archive Level	State
   Category	Reduced Subject Wages
   Balance Name	New Jersey Payroll Tax Reduced Subject Wages
   Tax Code	PAYTAX_ER
   Type	Balance
   Report Usage	Periodic and Quarterly

3. Add a row to the US Balance Definition table, and enter these values.

   Field	What you enter
   Legislative Data Group	Your US legislative data group
   Archive Level	State
   Category	Taxable Wages
   Balance Name	New Jersey Payroll Tax Taxable Wages
   Tax Code	PAYTAX_ER
   Type	Balance
   Report Usage	Periodic and Quarterly

4. Add a row to the US Balance Definition table, and enter these values.

   Field	What you enter
   Legislative Data Group	Your US legislative data group
   Archive Level	State
   Category	Withheld or Liability
   Balance Name	New Jersey Payroll Tax
   Tax Code	PAYTAX_ER
   Type	Balance
   Report Usage	Periodic and Quarterly

5. Add a row to the US Balance Definition table, and enter these values.

   Field	What you enter
   Legislative Data Group	Your US legislative data group
   Archive Level	State
   Category	Total Wage or Gross
   Balance Name	New Jersey Payroll Tax Gross Wages
   Tax Code	PAYTAX_ER
   Type	Balance
   Report Usage	Periodic and Quarterly

   Note: As the tax you're defining is for New Jersey, the tax filing processes automatically prefixes the tax code with NJ. For example, NJPAYTAX_ER.

Create Element Entries

After you configure the required balances, use the Element Entries task to create element entries for each employee subject to this New Jersey tax.

1. Start the Element Entries task for the selected employee.

2. Select the effective date for your new entry.

3. Click Create.

4. Select the New Jersey Payroll Tax element.

5. Click Continue and then Submit.

Validate Tax Calculations

Use these steps to validate your new New Jersey state tax.

1. Run your payroll.

2. Upon completion, check the Statement of Earnings run results.

   For further info, see How to View the Statement of Earnings for the US in the Help Center.

3. Verify the tax was calculated correctly and the State and Gross Earnings input values were correctly populated.

Extract the Payroll Data

For complete info about third-party tax reporting, refer to the US Third-Party Tax Filing Interface technical brief.

To extract the state tax data in preparation for submitting to a third-party tax filing agent:

1. Run prepayments.

   For further info, see Calculate and Validate Payroll Payment Distributions for the US in the Help Center.

2. Run the periodic archive.

   For further info, see Archive Periodic Payroll Results for the US in the Help Center.

3. Run the Third-Party Periodic Tax Filing Extract.

   For further info, see Oracle Cloud Human Capital Management for United States: Third-Party Tax Filing Interface (1594079.1) on My Oracle Support.

4. Check the output file.

   Verify the following.

   • Correct TAX CODE appears in the file

   • All four balances you defined were passed on one record for the NJPAYTAX_ER tax code

5. Run the Third-Party Quarterly Tax Filing Extract process to verify your state tax data.