Multi-entity payroll
Multi-entity payroll is payroll for a business operating through more than one legal employer, each with its own Employer Identification Number (EIN).
The group may share owners, administrators, and policies. Each entity still reports and deposits under its own registration, not as one combined company. A separate legal entity generally needs its own EINEIN (Employer Identification Number). An EIN, or Employer Identification Number, is the nine-digit federal tax ID the IRS assigns to a business, in the format XX-XXXXXXX.Click to open the term and its own state tax accounts. A location, department, or trade name inside one legal employer does not. Reconciliation follows the same entity boundary, because entity-level errors can offset each other inside a group figure. Transfers between entities usually involve a termination event in one and a hire event in the other.
What has to be decided per entity?
Every entity in the group needs its own answers before the first run. Payroll treats a legal employer, a trade name, a location, a division, and a cost center as separate dimensions. Collapsing them into one field produces the wrong filing later. Resolve the design before employees are loaded, because moving someone between entities afterward is not a profile edit. Confirm registration and reporting requirements for each entity with the agencies in every state where it operates.
| DECISION | WHAT TO SETTLE |
|---|---|
| Company record | Whether a separate record is required at all, and which EIN applies |
| Employees | Who belongs to the entity |
| Administrators | Whether they work across entities |
| Bank account | Which account funds the entity’s payroll |
| Reporting | Separate or consolidated |
| Pay dates and policies | Whether they differ |
General information, not legal or tax advice. Apply current federal and state rules with qualified guidance.