A Legal Entity can be set as a Payroll Common Payer for one or more Legal Entities on the Legal Entity record. When Child Legal Entities are set under the Payroll Common Payer, or the Parent Legal Entity, then Payroll will be cleared for each Child Legal Entity's Locations through its Payroll Common Payer. This can simplify the Payroll process for large organizations.

Learn more about Payroll Common Payer for Workforce here

Note: Contact R365 Support to enable this feature for your database.


To set up a Payroll Common Payer, ensure to complete the following prerequisite steps.

Step 1: Set the 'Payroll Clearing' Option

Navigate to System Preferences and open the 'Miscellaneous' tab. In the far, right column, update the 'Payroll Clearing' field to 'Per Common Payer' and then click 'Save'. This will enable the Payroll Common Payer feature and default all Legal Entities as a Parent Legal Entity/Payroll Common Payer.

Step 2: Update Legal Entity Records

Since all Legal Entities are marked as a Common Payer when 'Per Common Payer' is selected for 'Payroll Clearing', all Legal Entity records will need to be updated to indicate the true Payroll Common Payers and their Child Accounts.

To do this, open each Legal Entity record and update the 'Payroll' section to one of the following:

  • Payroll Common Payer / Parent Legal Entity - For Legal Entities that will be marked as a 'Payroll Common Payer', check the 'Payroll Common Payer' box
  • Non-Payroll Common Payer / Child Legal Entity - For Legal Entities that will have a Common Payer selected for them, leave the 'Payroll Common Payer' box unchecked and choose the Common Payer from the 'Payer' selector

Once each record is updated, ensure to save the record.

Completing Payroll

When entering Payroll, either manually or via import, ensure that the Location and debited GL Account is from the Payroll Common Payer Legal Entity. The 'Payroll Estimate Clearing' tab of the Journal Entry will then list all Locations of all Legal Entities for the selected Common Payer.

  • Note: If a legacy Payroll Journal Entry needs to have its Location updated to a Child Legal Entity, temporarily deactivate the feature to make the change.