Tax structure setup

Tax structure setup refers to the process of readying the Infor HR Talent HR Payroll environment to apply taxes properly. Business Software Inc. (BSI) is a tax provider that provides US federal tax tables and most state, province, local, city, and county tax tables you require. You must separately maintain any city or county tax that BSI does not provide. You must create tax authorities and map each tax authority to a BSI tax code within the BSI product.

If you have multiple unemployment experience rates within the same state, you must define multiple tax provider company codes in the tax provider. You assign the different tax provider company codes to separate legal establishments for a legal entity. A tax provider company on a legal establishment overrides the tax provider company on a legal entity. All tax deductions must be linked to the proper BSI tax authority through a Tax Authority for tax calculation.

A legal entity must be defined for each unique employer identification number (EIN). More than one legal entity can be defined, but the default legal entity is assigned on the organization’s country configuration. A tax provider company is specified on a legal entity.

For Canada payroll processing, you must create organization units that are aligned with the necessary combinations of legal entities and legal establishments that are required to support Canadian payroll tax structures and reporting requirements.

See the information about creating organization units in Infor HR Talent Setup and Administration Guide.

In Canadian payroll, a Legal Entity is required for each employer, and each Legal Entity requires a Legal Establishment. Legal establishments are mandatory for Canadian payroll processing and are used for wage and deduction history reporting.

When passing employee payment wages to TaxFactory Canada, for employees paid in more than one Legal Entity or Legal Establishment, wages are passed separately by legal entity or legal establishment, but Year-To-Date (YTD) wages are combined by Legal Entity.

Note: If an organization has multiple legal entities that share a common wage base for tax deductions or reporting, set the related legal entity flag on Country/Jurisdiction Configuration to Yes. Wages are then combined for all legal entities and their associated legal establishments in the pass to TaxFactory Canada.

TaxFactory Canada is a payroll tax calculation solution developed by BSI. TaxFactory Canada handles the complexities of Canadian payroll tax processing across federal, provincial, and territorial levels.