How Payroll Statutory Units, Legal Employers, and Tax Reporting Units Work Together
When you set up legal entities, you can identify them as legal employers and payroll statutory units (PSUs).
Depending on how you structure your organization, you may have only one legal entity that's also a PSU and a legal employer, or you may have multiple legal entities, PSUs, and legal employers.
Legal Employers and Payroll Statutory Units
PSUs enable you to group legal employers so that you can perform statutory calculations at a higher level, such as stopping limit taxes like Canada Pension Plan and Employment Insurance. In some cases, a legal employer is also a PSU. However, your organization may have several legal employers in one PSU. A legal employer can belong to only one PSU.
How you define a legal entity depends on how you plan to use it.
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If your implementation includes |
Then you need to |
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Oracle Fusion Human Capital Management |
Define the legal entity as a legal employer. HCM implementations require legal employers. |
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Oracle Fusion Global Payroll |
Define the legal entity as a PSU. |
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Multiple legal employers |
For tax reporting purposes, you can associate your legal employers with a single PSU. If you don't want the legal employers to report together, you must segregate them by PSU. |
Payroll Statutory Units and Legal Reporting Units
PSUs and legal reporting units (LRUs) have a parent-child relationship, with the PSU being the parent. An LRU is the lowest level component of a legal structure that requires registrations.
Tax Reporting Units and Legal Employers
TRUs are indirectly associated with a legal employer through the PSU. A single legal employer can use one or more TRUs and one or more legal employers can use a single TRU. For example, assume that a single TRU is linked to a PSU. Assume also that two legal employers are associated with this PSU. In this example, both legal employers are associated with the single TRU.
Use the Manage Legal Reporting Unit HCM Information task to designate an existing legal reporting unit (LRU) as a TRU. If you create a new LRU that belongs to a legal employer (that's not also a PSU), select a PSU and then, when you run the Manage Legal Reporting Unit HCM Information task, you designate it as a TRU and select the legal employer.
