How to Set Up Distributed Costing for the US

You can configure distributed costing for:

• Employee taxes

• Employer taxes and liabilities based upon earnings elements, such as wages, overtime, and shift pay

It involves these steps.

What you want to do	How you do it
Create a distribution group	Use the Object Groups task.
Configure your elements	Before you can set up distributed costing, make sure you have set up eligibility for all elements you want to cost. Use the Elements task.
Set up costing	Use the Costing of Elements task.
Enable distributed costing for tax elements	Use the Payroll Process Configuration task to enable distributed costing for work locations where a tax exists.
Cost resident withholding taxes	If you enable distributed costing, your resident withholding taxes and school district taxes go into suspense. Preventing this requires some special element configuration.

For further info, see the following sections.

Create a Distribution Group

Create a distribution group that includes your earnings elements.

1. From My Client Groups, click Payroll.

2. Click Object Groups.

3. Click Create.

4. Set these values.

   Field name	How you use it
   Name	Provide a meaningful name for your object group.
   Legislative Data Group	Select your US legislative data group.
   Type	Select Element Group.

5. Click Continue.

6. Select a start date.

7. Under Object Group Parameter, select Value for the Usage Type row.

8. Search for and select Distribution group.

9. Click Next.

10. Select the element classification or elements to include in the group, and click Submit.

    The costing option for the element's primary classification controls whether you can include the element in a distribution group. Typically, you include both standard and supplemental earnings in the distribution group. For further info, see Payroll Costing of Elements for the US in the Help Center.

For further info, see Overview of Object Groups in the Help Center.

Configure Your Elements

Use the Elements task to confirm that you created element eligibility records for the results elements of every element you want to cost.

Set Up Costing

This involves configuring the element eligibility records of every eligible results element. Do this even if you already configured the costing info for these eligibility records. If an element doesn't have a results element, cost the base element.

1. In My Client Groups, click Show More.

2. Under Payroll, click Costing of Elements.

3. Search for and select the element eligibility record of the element, such as an employer liability record.

   Note: Cost all element eligibility records for the results element, even if you set up the same costing info for every eligibility record. If there's no results element, cost the base element.

4. Update the record.

5. Set up the cost account information.

   1. Search for and select your element.

   2. Click Create Costing Details.

   3. Enter an effective date, and click Continue.

   4. Select the Distributed costing type.

   5. Select the element group you created as the distribution group.

   6. Select Transfer to General Ledger if you plan to transfer and post costing results to your general ledger.

   7. In Costed Input Values, add the input value that has a special purpose definition of primary output value as the input value to cost.

   8. In Cost Account, enter values for the segments that you want the costing process to exclude from its distributed costing calculations.

   9. In Offset Account, select the appropriate segments for the offset account, such as those that are different from the offset account the costing process uses for earnings and deductions.

Enable Distributed Costing to Use Contexts

The payroll process allocates the costing results of distributed elements, such as taxes, to earnings associated with the tax's work jurisdictions. The costing results of these distributed elements get distributed across all work regions, even if they aren't taxed.

You can configure the costing process so that the distribution occurs for only those work regions where a tax exists.

For example, an employee works in two states, New York and New Hampshire. State income tax (SIT) isn't collected in New Hampshire, so the SIT distribution occurs for New York earnings only.

To enable distributed costing for work locations where a tax exists:

1. Start the Payroll Process Configuration task.

2. In Default Group, find this parameter.

   Distributed costing to use contexts of set members Distributed costing should use contexts of set members for cost distribution of distributed element. Default: N.

3. Change its setting to Y.

Cost Resident Withholding Taxes

If you enable distributed costing, your resident withholding taxes and school district taxes go into suspense. To prevent this:

1. Use the Elements task to define three Information elements, one for each type of residence tax: state, county, and city.

   Be sure to give them names that easily identifies them with their tax.

2. For the state tax Information element, define the following input values.

   Field name	What you enter
   Name	Pay Value
   Display Sequence	1
   Unit of Measure	Money
   Displayed	Selected
   Allow User Entry	Selected
   Create a Database Item	Selected
   Name	State
   Display Sequence	2
   Unit of Measure	Integer
   Reference	State
   Displayed	Selected
   Allow User Entry	Selected
   Create a Database Item	Selected

3. For the county tax Information element, define these input values.

   Field name	What you enter
   Name	Pay Value
   Display Sequence	1
   Unit of Measure	Money
   Displayed	Selected
   Allow User Entry	Selected
   Create a Database Item	Selected
   Name	State
   Display Sequence	2
   Unit of Measure	Integer
   Reference	State
   Displayed	Selected
   Allow User Entry	Selected
   Create a Database Item	Selected
   Name	County
   Display Sequence	3
   Unit of Measure	Integer
   Reference	County
   Displayed	Selected
   Allow User Entry	Selected
   Create a Database Item	Selected

4. For the city tax Information element, define these input values.

   Field name	What you enter
   Name	Pay Value
   Display Sequence	1
   Unit of Measure	Money
   Displayed	Selected
   Allow User Entry	Selected
   Create a Database Item	Selected
   Name	State
   Display Sequence	2
   Unit of Measure	Integer
   Reference	State
   Displayed	Selected
   Allow User Entry	Selected
   Create a Database Item	Selected
   Name	County
   Display Sequence	3
   Unit of Measure	Integer
   Reference	County
   Displayed	Selected
   Allow User Entry	Selected
   Create a Database Item	Selected
   Name	City
   Display Sequence	4
   Unit of Measure	Integer
   Reference	City
   Displayed	Selected
   Allow User Entry	Selected
   Create a Database Item	Selected

5. For the school district tax Information element, define these input values.

   Field name	What you enter
   Name	Pay Value
   Display Sequence	1
   Unit of Measure	Money
   Displayed	Selected
   Allow User Entry	Selected
   Create a Database Item	Selected
   Name	State
   Display Sequence	2
   Unit of Measure	Integer
   Reference	State
   Displayed	Selected
   Allow User Entry	Selected
   Create a Database Item	Selected
   Name	School District
   Display Sequence	3
   Unit of Measure	Integer
   Reference	School District
   Displayed	Selected
   Allow User Entry	Selected
   Create a Database Item	Selected

6. Write and add a fast formula for each Information element.

   These formulas must:

   1. Capture the pay value from the original tax element.

   2. Populate it in the Information element's Pay Value input value.

   3. Attribute the wages to the appropriate work jurisdictions.

7. Create element eligibility for these elements. Be sure to select Distributed as the costing type.

The costing process now automatically takes the values of the State, County, City contexts from the Information elements you defined and uses the corresponding earnings.