What is the relationship between Payroll Statutory units and Tax Reporting units?

The correct answer illustrates that Payroll Statutory Units serve as the foundational entities under which Tax Reporting Units are organized. In the framework of Oracle HCM Cloud's global human resources functionality, Payroll Statutory Units represent the legal or geographical units that are responsible for payroll processing according to local laws and regulations. Each Payroll Statutory Unit is linked to specific legal requirements that dictate how payroll must be administered.

Tax Reporting Units, on the other hand, are derived from these Payroll Statutory Units. They focus more on the reporting functions required for tax compliance at various levels, ensuring the accurate capture and reporting of taxes for the employees within the respective Payroll Statutory Units.

This hierarchical relationship is established for effective management of statutory requirements and compliance measures. It allows companies to create a clear structure where tax obligations can be efficiently managed and reported based on the overarching payroll responsibilities defined by Payroll Statutory Units. Therefore, understanding this relationship is crucial for managing payroll and tax reporting effectively in Oracle HCM Cloud.