Examples of HCM Organization Models for Payroll

Use these examples to understand different models for human capital management (HCM) organizations that include a legislative data group (LDG). These examples include LDGs, which aren't an organization classification, to show how to partition payroll data by associating them with a payroll statutory unit.

Simple Configuration

This example illustrates a simple configuration that doesn't include any tax reporting unit.

Note the following:

• The legal employer and payroll statutory units are the same, sharing the same boundaries.

• Reporting can only be done at a single level. Countries such as Saudi Arabia and the United Arab Emirates (UAE) might use this type of model, as these countries report at the legal entity level.

This figure illustrates a simple configuration where the enterprise has only one legal entity, which is both a payroll statutory unit and a legal employer.

Multiple Legal Employers and Tax Reporting Units

This example illustrates a more complex configuration. In this enterprise, you define one legal entity, InFusion US, as a payroll statutory unit with two separate legal entities, which are also legal employers. This model shows multiple legal employers that are associated with a single payroll statutory unit. Tax reporting units are always associated with a specific legal employer (or employers) through the payroll statutory unit.

The implication is that payroll statutory reporting boundaries vary from human resources (HR) management, and you can categorize the balances separately by one of the following:

• Payroll statutory unit

• Legal employer

• Tax reporting unit

This configuration is based on tax filing requirements, as some tax-related payments and reports are associated with a higher level than employers. An example of a country that might use this model is the US.

This figure illustrates an enterprise that has one payroll statutory unit and multiple legal employers and tax reporting units.

One Payroll Statutory Unit and Two Tax Reporting Units

This model makes no distinction between a legal employer and a payroll statutory unit. You define tax reporting units as subsidiaries to the legal entity.

In this enterprise, legal entity is the highest level of aggregation for payroll calculations and reporting. Statutory reporting boundaries are the same for both payroll and HR management. An example of a country that might use this model is France.

This figure illustrates an example of an organization with one legal entity. The legal entity is both a legal employer and a payroll statutory unit and has two tax reporting units.

One Payroll Statutory Unit with Several Tax Reporting Units

In this model, the enterprise has one legal entity. Legal employers and tax reporting units are independent from each other within a payroll statutory unit, because there is no relationship from a legal perspective. Therefore, you can run reporting on both entities independently.

Using this model, you wouldn't typically:

• Report on tax reporting unit balances within a legal employer

• Categorize balances by either or both organizations, as required

An example of a country that might use this model is India.

This figure illustrates an enterprise with one legal entity that's a payroll statutory unit and a legal employer. The tax reporting units are independent from the legal employer.

Multiple Payroll Statutory Units with Several Tax Reporting Units

In this model, the enterprise has two legal entities. The legal employers and tax reporting units are independent from each other within a payroll statutory unit, because there is no relationship from a legal perspective. Therefore, you can run reporting on both entities independently.

Using this model, you wouldn't typically:

• Report on tax reporting unit balances within a legal employer

• Categorize balances by either or both organizations, as required

An example of a country that might use this model is the United Kingdom (UK).

This figure illustrates an enterprise with two legal entities, and legal employers and tax reporting units are independent from each other.