Example: Same-Sex Spouses and Domestic Partners (USA)
Global Modern Services (GMS) has employees in many states. Some of these tax authorities recognize both same-sex spouses and domestic partners, some recognize only 1 of the 2 types of relationships, and others recognize neither.
Sandy, a payroll administrator, wants to create pay components for the Medical - National Medical HMO benefit for same-sex spouses and domestic partners of GMS employees. Sandy must create these 4 pay components:
Benefit for | Deduction | Earning |
|---|---|---|
Same-Sex Spouse
| Employee contribution | Employer contribution |
Domestic Partner
| Employee contribution | Employer contribution |
However, she must decide between these 2 types of configurations, whichever requires fewer exceptions:
- Pretax deductions and nontaxable earnings with tax authority exceptions for the states that don’t recognize these relationships.
- Post-tax deductions and taxable earnings with tax authority exceptions for states that do recognize these relationships.
Sandy researches which tax jurisdictions recognize which types of relationships. She decides to create post-tax and taxable pay components with exceptions for any tax authorities that differ.
Configure benefits for same-sex spouses and domestic partners.
Security:
Set Up: Payroll (Calculations - Payroll Specific)
domain in the Core Payroll functional area.Qualifying employees pay the associated taxes for medical benefits according to the tax authority guidelines.
Sandy updates the tax authority exceptions for the pay components when changes occur.