Overview of Payroll Costing

Payroll costing tracks all your costs incurred to compensate your employees and distribute those costs to General Ledger. For example, salary, bonuses, paid leave, employer-paid portion of all payroll taxes are tracked and disbursed as expenses to your work structure.

• The Payroll Cost Allocation key flexfield is the basis for the accounting entries to be created and reported to track your labor costs. Consider all aspects and impact of this flexfield and its uses during your planning.

• Calculate Payroll flow calculates payroll, produces run results and costs them to your work structure and costing hierarchy:

  • Cross-Validation Rules validate payroll cost account combinations during the costing process and prevent invalid combinations entries sent to general ledger.

  • Payroll costing derives a cost account number for each payroll run result. Typically each segment of the cost account number represents the general ledger accounting structure; however this may not always be the case.

  • Payroll costing values are mapped to various segments of the customer's general ledger accounting structure.

• Calculate Costing of Payments flow creates costing results based on the prepayment results. And, when applicable, after the cash management reconciliation it allocates costs for payment results, to include voided, cleared and external payments.

• Calculate Retroactive Costing flow recalculates costs for retroactive changes to costing.

• Cost Adjustments are corrective actions applied to the payroll run costing result and, based on the payroll run, to reports and calculations.

• Calculate Partial Period Accruals flow calculates costs for a pay period that overlaps two accounting periods to create accrual entries for partial pay.

• Transfer to Subledger Accounting flow transfers payroll costs to subledger accounting (SLA) for review, reports and posts to the General Ledger.

• Reverse Transfer to Subledger Accounting flow reverses the payroll subledger accounting entries that were posted in final mode using the Create Accounting process.

Setup Tasks and Considerations

Set up enterprise structures, legal entities, and organizations to create and maintain information related to people, employment, and work structures. The setup also includes tasks to define payroll business objects required for processing and costing payroll, processing payments, and generating statutory reports.

Use this table of setup tasks to plan your implementation of payroll and payroll costing for your business requirements.

Payroll	Description
Cost Accounting	Legal entities, legal reporting units, tax reporting units, payroll statutory units, legal authorities, legal registrations and jurisdictions, and legal authorities.
Cost and Profit Planning	Organization structures, business units, and organization models that best suit your business process.
Landed Cost Management	Configure elements and formulas to record earnings and deductions for processing payroll and reporting.
Project Costing Base	Define payroll objects and payment methods required for payroll calculations and reporting, and processing and making payments.

Payroll Costing Setup

Use Payroll Costing and Cost Allocation setup tasks to configure key flexfields, value sets, descriptive flexfields, messages and other costing structures.

Start your implementation of Global Human Resources Cloud Payroll Costing as a user with the Application Implementation Consultant role (ORA_PAY_APPLICATION_IMPLEMENTATION_CONSULTANT_JOB). Refer to the Functional Setup Manager guide to manage the opt-in and setup of your offerings.

You typically set up costing during your initial payroll implementation. As new objects, such as payrolls, departments and jobs are added, you may have additional configuration but only at the costing level.

• Costing setup may use person-specific data, such as a department or a legislative area like state, county or city, referred to as contexts.

• Unique costing for a person or an element entry may be entered on an as needed basis during regular payroll processing.

Refer to the Administering Global Payroll Costing guide in the Oracle Help Center for details about implementing and administering payroll costing.