Steps: Set Up a Common Paymaster (USA)

Administrator Guide

Review setup considerations for common paymaster company relationships.

Create the common paymaster company and the related companies.

Security:

Manage: Company
domain in the Organizations and Roles functional area.

Set Up: Payroll (Tax Filing/W-2s) - USA
in the USA Payroll functional area.

You can create a common paymaster company relationship in Workday. During the relationship period, the designated common paymaster company pays the wages of all employees within companies in the relationship.

Workday aggregates the wages earned across all companies involved for purposes of limit calculations for:

OASDI.

Medicare.

Federal Unemployment Insurance (FUI).

State Unemployment Insurance (SUI) for configured states.

You're responsible for ensuring eligibility under applicable law for:

All companies included in the common paymaster relationship.

All employees paid by the common paymaster.

All states configured in the common paymaster relationship for SUI aggregation.

Workday recommends starting a common paymaster relationship on 01-01 in the effective tax year before running payroll. When you retroactively do any of these actions, Workday might not automatically correct completed and in-progress results:

Create a common paymaster relationship after you've processed any payroll period in that year.

Add a state after you've processed any payroll in that effective quarter.

Add a related company after you've processed any payroll in that year.

You can create and extract common paymaster company relationships in bulk using these web services:

Get Common Paymasters

Put Common Paymaster

Access the

Create Company Relationship

task.

From the

Company Relationship Type

prompt, select Common Paymaster
.

As you complete the task, consider:

Option	Description
Reporting Tax Year	The tax year in which the common paymaster relationship begins and is applicable for the entire specified tax year. The year must be 2021 or later. Workday recommends you select a tax year without payroll results. Starting a retroactive common paymaster relationship won't reflect in already completed or in-progress payroll results or tax filing.
Inactive as-of Tax Year	(Optional) The company relationship is no longer active as of 01-01 of the tax year selected. Example: You only want the common paymaster relationship to calculate for tax year 2022. You select 2022 as the Reporting Tax Year and 2023 as the Inactive as-of Tax Year . The common paymaster relationship is only active for tax year 2022. Common paymaster calculations no longer occur for pay results with a payment date on or after 2023-01-01.
Related Companies	The prompt only displays companies that aren't part of another company relationship during the same time period. If needed, review the effective dates of each company relationship to identify concurrency. Workday recommends that you don't add related companies to an existing common paymaster relationship midyear. The change won't reflect in already completed or in-progress payroll results or tax filing.
State Configuration	When you include a state in your configuration, Workday aggregates the State Unemployment Insurance (SUI) wages earned across all the companies involved in the relationship for limit calculations. Workday recommends configuring 1 state per row to help you easily identify configuration errors. This method also provides clarity when auditing your configuration history. You can't delete a state once you've calculated payroll within the configured quarters. You're responsible for ensuring that the states you include permit common paymaster under applicable law.
Start Quarter	Workday includes a state in common paymaster calculations as of the first day of the start quarter you select. Applicable SUI calculations occur for payroll results with a payment date that's within the effective quarters of the configured row. Workday recommends that you don't add a state retroactively after you've processed payroll within the start quarter. The change won't reflect in already completed or in-progress payroll results or tax filing.
Inactive as-of Quarter	The state unemployment calculations are no longer active as of the quarter selected. Example: You only want the state included in 2022-Q1 and 2022-Q2 calculations. You select the 2021-Q1 start quarter and the 2021-Q3 inactive as-of quarter. The common paymaster calculations only include the states for 2022 Q1 and Q2. Workday doesn't recommend inactivating a state retroactively, after you’ve processed payroll within the inactive quarter selected. The change won't reflect in already completed or in-progress payroll results or tax filing.
Payroll State Authority	Select the state you want to include SUI calculations for. For a state to display in this prompt, it must be: Configured on the Company State and Local US Tax Reporting task for the designated common paymaster company. Active in the Start Quarter you configure for the common paymaster relationship.
Periodic Tax Reporting Quarterly Tax Reporting	Workday uses this configuration as the default to separate tax filing. Workday doesn’t support creating combined tax filing for all companies.
Year End Forms	Select whether to deliver year-end forms separately for each company or combined for all companies. When you select combined year-end reporting: You can only select the common paymaster managing company when reporting on and creating your year-end forms. You can generate a single W-2 or W-2C form for employees who work concurrently for 2 or more related corporations. Workday combines the worker's earned state and local taxes by ID. Workday takes the worker's print elections from the common paymaster managing company. Workday reports the designated common paymaster company for the federal boxes on the W-2. The W-2 includes aggregated federal taxes across all companies in the common paymaster relationship. Workday lists each company and state combination on separate lines and reports the individual EINs for each company. Once you create W-2s within the effective date of the common paymaster relationship, you can't modify the year-end form configuration. To change the configuration, you must inactivate the current common paymaster and create a new common paymaster relationship.

Use the

Edit Company Federal US Tax Reporting

task to enter the same Federal Unemployment Tax Act (FUTA) tax configuration for all companies in the relationship. The effective dates of your configuration should be before or at the start of the common paymaster relationship effective dates.

If you need to change your configuration after the start of the common paymaster relationship, verify that the configuration and effective date are the same across all the companies in the relationship.

See Set Up Company Federal Taxes (USA), Set Up Company State Taxes (USA), and Set Up Company Local Taxes (USA).

Use the

Edit Company State and Local US Tax Reporting

task to configure all state and local tax authorities that exist for all related companies in the common paymaster company.

These tax authorities must exist in the common paymaster company before they can be calculated in the pay results of the related companies.

The effective dates of your configuration should be before or at the start of the common paymaster relationship effective dates.

If you include a state in your common paymaster company relationship configuration for purposes of SUI aggregation, configure the same SUI rate for that state across all the companies in the relationship. This is the rate that the state might assign to you when approving your request to file as a common paymaster for SUI reporting.

If you don't configure the same SUI rate for the state across all companies in the relationship, unexpected SUI variances can occur when processing the common paymaster payroll for the state.

If you need to make configuration changes after the CPM relationship has started, ensure that the configuration and effective dates are the same across all the companies in the relationship.

Enter worker tax elections in the common paymaster with effective dates that are within the relationship effective years.

The common paymaster company must enter and manage all tax elections as long as the relationship is in effect.

You can copy tax elections from related companies to the common paymaster company. See Copy Tax Elections for a Worker (USA).

Verify that you configured all the state and local tax authorities in the common paymaster company before you add a worker tax election or run the

Copy Tax Elections for a Worker (USA)

task. You won't be able to add or copy a tax election otherwise.

Workday applies the common paymaster tax elections to all jobs and companies within the relationship. Workday doesn't apply tax elections in the related companies as long as the relationship is active.

Amanda Adams works at University Hospital as a surgeon and concurrently works as a professor at University Campus. The hospital and campus belong to different companies, each with their own FEIN.

Both University Hospital and University Campus meet the IRS definition of related companies. Amanda meets the definition of concurrent employment. The state in which both companies operate permits common paymasters for SUI calculations.

In this example, the OASDI wage limit is 142800 and the tax limit is 8853.60.

Common Paymaster Configured?	Result	OASDI Calculation
No.	Workday calculates the FICA, FUTA, and SUI limits for both companies separately. Multiple annual limits apply for the same employee and the tax liability increases.	University Hospital: 142800 x 6.2% = 8853.60 (+ Employer match). University Campus: 142800 x 6.2% = 8853.60 (+ Employer match). Amanda pays 17707.20. The employer pays 17707.20.
Yes.	FICA, FUTA, and SUI limits are aggregated across both companies. Workday applies a single annual limit and the designated common paymaster acts as a single employer.	University Hospital: 99600 x 6.2% = 6175.20 (+ Employer match). University Campus: 43200 x 6.2% = 2,678.40 (+ Employer match). Amanda pays 8853.60. The employer pays 8853.60.

You can edit the relationship using the

Edit Common Paymaster

Edit Company Relationship

tasks.

You can use the

Delete Common Paymaster

task as long as there are no payroll calculations performed during the relationship.

Copy Tax Elections for a Worker (USA)