Objective: In previous article, we saw how to create users and roles in fusion app. In this article we will see how the basic terms in Fusion apps that are used once the project is created.

Legal Entities: It will be created via XLE (Legal Entity Configurator) UI and can be marked as PSU (Payroll Statutory Unit) or Legal Employer classification.

Legal Employer: It is the employer from HR law point of view. It will only contain HR related information and not payroll tax information. For each legal employer created via XLE, a corresponding Organization Unit gets created in HCM

Payroll Statutory Unit: Legal entity can be marked as Payroll Statutory Unit also. Using PSU we can group multiple legal employers so that statutory calculations can be performed at this level. A legal employer can only belong to one PSU and PSU is the highest level of the aggregation for the person. For each PSU created via XLE, a corresponding Organization Unit gets created in HCM with PSU as a classification. While creating Legal Entity marked as Legal Employer, Parent PSU has to be entered. So while creating payroll relationship this Parent PSU would be employee’s relevant PSU which is associated with employee’s legal employer.

Tax Reporting Unit: Tax Reporting unit groups employee records so that they can be reported together for tax or other purposes. To create a TRU, users will need to enter registration information via XLE. Each time a Legal Entity is created in XLE, a primary Legal Reporting Unit is also created. Users have the option to define additional Legal Reporting Units if required and there is a parent/ child relationship between Legal Entity and Legal Reporting Units.

HR Reports would be based on legal employers and reporting establishments within a legal employer. For Payroll Reports TRUs would be used, as PSU is an employer from Payroll perspective. TRU would be directly linked to the person’s terms and assignments via deduction cards.

Legislative Data Group: An LDG defines the payroll and related data partition context for a user allowing customers to partition their Payroll data. A user can partition payroll data at a level that is relevant to their enterprise, i.e. at one of the following:

• PSU level

• Country level

• Level between PSU and country

Department: A Department can be any organization to which workers are assigned e.g. HR Department, IT Department etc.

Difference between Legal Entity and Legal Employer :

Legal entity will be created via Legal entity configurator also known as XLE user interface.

It is without employee and is a dummy entity.

Legal entity cannot be a legal employer.

Legal employer contains PSU(Payroll Statutory Unit).

PSU(Payroll Statutory unit) is “legal entity” that are responsible for paying workers, including payment of payroll tax and social insurance.

The legal entity that has given privilege of PSU will be considered as Tax Reporting Unit.

If there are 2 legal employer, there will be 2 data group to save data for each legal employer separately.

For example:

• In the above diagram, ABC Pvt. Ltd is an Organization.

• L.E 1 i.e Legal Employer 1 is just below the Organization.

• L.E 2 i.e Legal Employer 2 is the Legal Employer of US. It is country specific and will have its own payroll.

• L.E 3 is legal employer of India.

• Suppose India has 2 branches i.e one in Mumbai and the other one in Bangalore, the Mumbai branch is head office. So the Mumbai branch i.e L.E 3 will be parent and Bangalore branch i.e L.E 4 will be child.

• As L.E 3 is a parent Employee so it will have payroll for L.E 4 employer as well.

Note: Oracle uses Universal Time format(UTC) in fusion apps.

Legislation code will describe the country where transaction takes place and accordingly the time and date can be recognised.

Varun Kapila

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