What is 'tax area' in SAP PY-US - USA?

tax area - Overview

• Component: PY-US

• Component Name: USA

• Description: The set of all tax authorities that levy taxes upon an employee. This set may consist of one, some or all of the tax authorities at the school district, city, county, state or federal levels.

tax area - Details

• 
  Key Concepts: 
  A tax area is a geographical area in which taxes are collected and managed. In SAP, the tax area is a component of the payroll system that is used to determine the taxes that are applicable to an employee’s salary. The PY-US USA component of SAP is used to manage taxes in the United States. 
  
  How to use it: 
  The PY-US USA component of SAP is used to manage taxes in the United States. It allows users to set up tax areas for each state, as well as for local and federal taxes. It also allows users to set up tax rates for each tax area, and to calculate the taxes that are applicable to an employee’s salary. 
  
  Tips & Tricks: 
  When setting up a tax area in SAP, it is important to ensure that all of the applicable taxes are included. This includes both state and federal taxes, as well as any local taxes that may be applicable. Additionally, it is important to ensure that the correct tax rates are applied for each tax area. 
  
  Related Information: 
  For more information on setting up tax areas in SAP, please refer to the official SAP documentation on payroll taxation. Additionally, there are many online resources available that provide detailed instructions on how to set up and manage tax areas in SAP.