Prerequisite Tasks for Payroll Setup

The Define Payroll task list in the Setup and Maintenance work area contains most of the setup tasks required for payroll processing. However, first you must complete the required common application configuration tasks.

You may have already done some of these tasks because other HCM applications require them. Revisit tasks to address payroll-specific tasks, such as creating tax reporting units.

Perform the prerequisite tasks in the following task lists within Define Common Applications Configuration for Human Capital Management:

• Define Features by Country or Territory

• Install and load geography and tax information data files

• Define Geographies for HCM

• Define Enterprise Structures for HCM

Define Features by Country or Territory

Use the Manage Features by Country or Territory task to select the correct product for each of your legislations and ensure that the appropriate features work correctly in your implementation. These settings control the availability of payroll-related features, such as element templates, and address style and address validation rules used in processes and reports.

For further information, see the Selecting Country Extensions: Critical Choices topic in the Help Center.

Install and Load Geography and Tax Information Files

You must install Vertex prior to any payroll processing. As part of the initial setup, run the following tasks:

• Manage Geography Lookups for China

• Import Country Structure for China

• Import Geography Data for China

• Manage Geography Validation for China

Define Enterprise Structures for HCM

Complete tasks in the task lists shown in this table.

Task List	Action
Define Legal Jurisdictions and Authorities for HCM	Create a legal jurisdiction if not already created or predefined. Create a legal authority for each government body you interact with. Create addresses for legal entities and legal authorities.
Define Legal Entities for HCM	Create at least one legislative data group to partition your payroll data. Create at least one legal entity designated as a payroll statutory unit (PSU) for each legislative data group. For China, it's recommended to have only one PSU under an LDG. And attach multiple legal entities to this LDG. You can assign a legal entity as a legal employer. Associate the PSU with a legislative data group. Define Tax and Social Security Calculation information at the PSU level.
Define Legal Reporting Units for HCM	Create any additional legal reporting units that you need under a PSU and designate them as tax reporting units. Optionally, create calculation cards for statutory deductions for each tax reporting unit.
Define Business Units for HCM	Create business units that you can use to perform one or more business functions.
Define Chart of Accounts for Enterprise Structures Define Accounting Configurations for HCM	Create charts of accounts, ledgers, and accounting calendars. When you create a bank for a payment source, you must select a legal entity that's assigned to a ledger for the associated legislative data group. Payroll costing also requires these financial components.