1. Implementing Payroll for Canada
  2. Enterprise Structures

Enterprise Structures

Setting up an enterprise structure for Canada involves these tasks:

  1. Defining a legislative data group

  2. Defining legal jurisdictions

  3. Defining legal authorities

  4. Defining legal addresses and locations

  5. Defining legal entities and legal reporting units

  6. Defining legal entity registrations

You can perform all setup tasks under Workforce Deployment offering in the Setup and Maintenance work area. Canada supports all the organization models. These are the key points you must consider as you create and set up Canadian enterprise structures.

Legislative Data Groups

A legislative data group (LDG) defines the payroll and related data partition context for a user. Create at least one LDG for each country where an enterprise operates.

Use the Manage Legislative Data Groups task to create a Canadian LDG. Set the Country to Canada and the Currency to Canadian Dollar. Select a Cost Allocation Structure appropriate for your implementation.

Legal Jurisdictions

Set up jurisdictions before creating registrations. Canada has federal and provincial levels of jurisdictions. Set up the jurisdictions, and define the registrations and legal categories.

Define jurisdictions as required, depending on the provinces that you operate in. Use the Manage Legal Jurisdictions task to create legal jurisdictions.

Legal Authorities

A legal authority is a government or legal body. A legal authority is charged with powers to make laws, levy and collect fees and taxes, and remit financial appropriations for a given jurisdiction. Use the Manage Legal Authorities task to create legal authorities.

It is optional to define legal authorities for Canada. Some examples of legal authorities that you can set up include: Canada Revenue Agency, Revenu Québec, Workplace Safety and Insurance Board, Ministry of Finance, and so on.

Legal Addresses and Locations

A legal address is the address of record for an entity. For example, the legal address of a legal authority is used in communications with that authority. No legal addresses are predefined for Canada. Create legal addresses for all organizational units of the enterprise. Create legal addresses before creating legal entities.

Use the Manage Legal Address task to create legal addresses. For each address you create, select Canada as the country so that the Canadian address style is used.

The Census Metropolitan Area (CMA) code is used to identify a location area for Employment Equity reporting. Use the Manage Locations task to create a location. If you submit Employment Equity reports, in the Canada Employment Equity Interface Rules section, select the Census Metropolitan Area for this location.

Legal Entities, Legal Employers, and Payroll Statutory Units

Once you have completed the tasks mentioned above, you can create legal entities. When defining a legal entity, consider the context in which the legal entity is used:

  • Define legal employers in an HCM implementation,.

  • Define a legal entity as a legal employer and a payroll statutory unit (PSU), thus sharing the legal responsibilities of employment and payroll calculations and reporting.

  • If multiple legal employers are grouped together for tax reporting purposes, you can associate all of them with a single PSU. If legal employers don't report together, they must not share a PSU.

No legal entities are predefined for Canada. You must create all legal entities that apply to the enterprise you're setting up. The North American Industry Classification Systems (NAICS) code is used for Employment Equity Reporting. You can specify the code while creating a legal entity.

Use the Manage Legal Entities task to create legal entities.

The Provincial Medical Carrier, the agency that administers provincial medical for the province, is predefined in the application. Use the Manage Legal Entity HCM Information task in the Setup and Maintenance work area to define the Provincial Medical Account details at the PSU level. Define the thresholds and rates to calculate the liability for the account at the PSU level.

The Workers' Compensation Boards for each province are predefined in the application. Use the Manage Legal Entity HCM Information task in the Setup and Maintenance work area to define the Workers' Compensation Account details. Define the Workers' Compensation Account and the Workers' Compensation Classification Unit information at the PSU level.

Tax Reporting Units

The application automatically creates the default tax reporting unit (TRU) for a legal entity when the PSU is created. To facilitate electronic submission of year-end reports, the Canadian and Quebec governments assign a transmitter number to an employer. The company can designate one employer account number or Quebec identification number as the transmitter.

A transmitter can file slips for itself or on behalf of other TRUs. The transmitter information is captured at the TRU-level. If a TRU is designated as a transmitter, the information entered in the interface rules is used for year-end reporting to the government. Multiple TRUs with different account numbers can use the same transmitter for submission of reports. Use the Manage Legal Reporting Units HCM Information task to define transmitter information.

The Run Record of Employment Archive process requires the primary contact details entered for the legal reporting unit (LRU) associated with the legal employer. Define the Record of Employment (ROE) contacts on the Manage Contacts page from the Manage Legal Reporting Unit page, while defining the LRU. You can define additional contacts; however, designate the contact to be reported on the ROE, as the primary contact.

Registrations

The application automatically creates the registration with the identifying jurisdiction you select when you create a legal entity. If the legal entity interacts with other legal authorities, create additional registrations as appropriate.

Set up registration information for a LRU or a TRU in the territory where it operates. The registrations defined at the LRU represent the accounts for remitting and reporting statutory deductions and year-end reporting. Register with these institutions, as required:

  • Canada Revenue Agency for federal taxes

  • Revenu Québec for Quebec taxes

  • Northwest Territories for payroll tax

  • Nunavut for payroll tax

Use the Manage Legal Entity Registrations task to set up registrations for legal entities.