---
title: "Sprout Payroll: Transferring an Employee Between Companies"
---

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# Sprout Payroll: Transferring an Employee Between Companies

### **Overview**

This article outlines the recommended process for transferring an employee from one company to another within **Sprout Payroll**.

The process depends on whether the employee is transferring to a company under the **same Reporting Company** or a **different Reporting Company**. Following the correct process helps ensure accurate payroll, YTD records, tax computation, and BIR reporting.

A **Reporting Company** refers to companies that share the same tax reporting entity for annualization and BIR reporting. If you are unsure whether the companies belong to the same Reporting Company, please contact your Payroll Administrator or Sprout Support.

---

### **Before You Begin**

Before transferring an employee, ensure there are **no outstanding payroll transactions** in the current company, such as open or unposted payroll runs, pending adjustments, or Final Pay.

Once all payroll processing is finalized, tag the employee as **Resigned** in the current company before proceeding with the transfer.

---

### **Scenario 1: Transfer to a Company Under the Same Reporting Company**

When the employee is transferring to another company that belongs to the **same Reporting Company**, the employee's Year-to-Date (YTD) earnings and taxes should continue accumulating to ensure accurate annual tax computation.

##### **Steps**

1. **Tag the employee as Resigned** in the current company.
2. **Dummy the employee's old profile information**, such as Government IDs, following the rehire process.
3. **Reference:** [What Should Be Done When an Employee Is Re-Hired?](https://guide.sprout.ph/what-should-be-done-when-an-employee-is-re-hired?hsLang=en) (Follow Item 2.)
4. **Create a new employee profile** under the new company; the original hire date should be retained when creating the new employee profile under the same Reporting Company. Retaining the original Hire Date ensures continuity of employment within the same Reporting Company for payroll and annual tax computation.
5. **Generate the employee's YTD Report** from the old company.
6. **Reference:** [How to Generate the YTD Report in Sprout Payroll?](https://guide.sprout.ph/how-to-generate-the-ytd-report-in-sprout-payroll?hsLang=en)
7. **Upload the employee's YTD data** to the new company to ensure that previous earnings and taxes are included during annual tax computation. This should be completed before processing the employee’s first payroll in the new company. Otherwise, the employee’s taxes and Year-to-Date (YTD) values may be calculated incorrectly.
8. **Reference:** [How to Upload YTD](https://guide.sprout.ph/how-to-upload-ytd?hsLang=en) /[How to Upload YTD using Adjustment Run](https://guide.sprout.ph/how-to-upload-ytd-using-adjustment-run?hsLang=en)

##### **Expected Result**

- The employee starts under a new profile in the new company.
- Year-to-Date earnings and taxes are carried over.
- Annualization and tax computation continue correctly under the same Reporting Company.

---

### **Scenario 2: Transfer Under a Different Reporting Company**

When the employee is transferring to a company with a **different Reporting Company**, the previous employment should be treated as a separate employer for tax purposes.

##### **Steps**

1. **Tag the employee as Resigned** in the current company.
2. **Process the employee's Final Pay** in the old company.
3. **Generate the employee's BIR Form 2316.**
4. **Reference:** [How To Generate BIR Form 2316 from Sprout Payroll](https://guide.sprout.ph/how-to-generate-bir-form-2316-from-sprout-payroll?hsLang=en)
5. **Dummy the Government IDs on the old employee profile** to free the IDs for use in the new employee record.
6. **Create a new employee profile** under the new company.
7. Set the **Hire Date** to the employee's official transfer date.
8. **Encode the employee's Previous Employer information** using the generated BIR Form 2316.
9. Encode the Previous Employer information before running the employee's first payroll in the new Reporting Company.
10. This ensures that the employee's tax computation remains accurate for the remainder of the calendar year.
11. **Reference:** *Synced Accounts:* [How to Add Previous Employment Details in the Alphalist?](https://guide.sprout.ph/synced-accounts-how-to-add-previous-employment-details-in-the-alphalist?hsLang=en)

##### **Expected Result**

- Final Pay is completed under the previous employer.
- A new employment record is created under the new Reporting Company.
- Previous employer tax information is considered in the succeeding payroll computations.
- Annual tax computation and BIR reporting remain accurate and compliant.

---

### **Additional Notes**

- Always ensure that the employee’s **old profile is properly dummied** before creating a new employee profile. This is required to prevent **duplicate Government ID validation errors** when creating the new profile.
- Use the employee's official transfer date as the Hire Date for the new profile.
- Follow the appropriate process based on the Reporting Company to prevent issues with YTD balances, tax computation, and statutory reporting.

---

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