In Employment Hero, an additional employing entity refers to a separate business or ABN that operates under the same payroll file.

This is useful for businesses that manage multiple legal structures, such as companies, trusts, or partnerships, and want to streamline payroll processing within a single platform.

Key Things to Know About Additional Employing Entities

When working with multiple entities in one payroll file, there are a few important considerations:

• Report Filters: Most reports allow you to filter by employing entity, but not all do.
• Employee Assignments: An employee cannot be employed by two entities within the same pay period.
• Journals: While you can process a pay run that includes employees from multiple entities, only one pay run journal will be generated. If you need separate journals per entity, you must run separate pay runs for each employing entity.
• Bank Accounts: Each pay schedule/pay run can only have 1 bank account in the ABA file.
• ATO Access Manager: You must have the appropriate Access Manager permissions set up for all ABNs involved. Each ABN must be active and registered.

1. Create the new company as an entity in the payroll platform.

  If using Beam or HeroClear as your super clearing house, you will also need to register for these in the new entity.

2. Set their ATO settings appropriately

 This should include setting up your electronic lodgement details with the ATO so that the ATO knows that the payroll data is now coming from a new software provider.

ATO-Settings

3. Create a new pay schedule for the new employees.

Use an identifier in the name to avoid confusion, e.g. ABC fortnightly

Pay-Schedules-Set-Up

4. Update your HR platform.

Any time you update a setting in the payroll platform, you also need to pull the information through to the HR platform. You can complete this through General Settings> Add-ons> Action> Update>Organisation details AND Pay items. This ensures that all information is the same on both platforms.​ Otherwise, the HR platform will override the payroll information during the next sync.

5. Import employees into the HR platform.

 By doing the above first, the entity and pay schedule will be available to choose for the new employees.

Update Employee HR files in bulk | Video 

6. Follow the transition steps for the STP reporting.

 The following guide may assist you in this: Transition-options-available-with-STP-reporting.

 The opening balances year should not be changed from the original employees' year as it will cause issues at EOFY time. Any opening balances for the additional employees will need to be added individually in the payroll platform at Employee profile > opening balances

7. Add the new company's bank account details.

The following guide may assist you in this: ABA-Files

8. How will the payruns be paid from the correct account?

 The first time a payrun is finalised from the new pay schedule, you will need to click on the payment file and then payment file settings to select the correct bank account. You only need to do this the first time as that setting will then hold for that pay schedule.

How Additional Employing Entities Work with STP Reporting

When operating with multiple ABNs under a single Employment Hero file, it's essential to configure your ATO settings correctly for Single Touch Payroll (STP) compliance.

Due to this, your ATO Settings must reflect the correct settings:

As An Intermediary for Multiple Employing Entities:

This setting is broken up into 2 sections:

(a) the Intermediary details; and

(b) the Business Details. The business details fields required to be completed are identical to the 'As the Employer' details.

The Additional details required to be completed pertain specifically to the Intermediary themselves are as follows:

• ABN
• Contact Name
• Phone Number
• Contact Email

You can choose one of the employing entities to act as the Intermediary or another entity of the business.

All the Intermediary fields are compulsory. You will not be able to save the ATO Supplier Settings without completing all the fields.

If you click Copy from Business Settings, it will populate the business fields from the information previously entered on the business details screen. This function can be used regardless of what ATO setting is chosen:

The ABN field (in the Business Details or the Employer sections) will automatically populate from the business details page, even if the Copy from Business Settings option is not selected. And, the ABN field cannot be edited.

Once this is done, you'll be able to lodge both pay and update events successfully for all entities.

Why You Need to Be Set Up as an Intermediary?

You are managing payroll for multiple ABNs under one consolidated platform. When it comes to Single Touch Payroll (STP) reporting, the ATO requires that if you are lodging on behalf of another ABN (i.e., not your own), you must do so as an intermediary.

This is because each ABN is a separate legal employing entity, and lodging STP data on their behalf, even within the same Employment Hero file, means you are effectively acting as an agent for those entities. The ATO mandates that you must have the correct intermediary permissions set up in Access Manager to do this.

This setup allows Employment Hero to facilitate lodgements for multiple entities, but the ATO will only accept the data if the correct authorisations are in place.

What You Need to Do In Access Manager for the ATO

To ensure successful lodgement and remain compliant with ATO requirements, please make sure:

You are set up as an intermediary in ATO Access Manager for each of the ABNs included in your Employment Hero file:

1. Go to 'Access Manager', log in to the ABN that is not the nominated Intermediary ABN.
2. Click on 'who has access to my business', then in the blue band near the top, 'Appoint New Business'.
3. Enter the intermediary entity's details
   
   
4. There is then a step to choose the access level. Under the heading ATO Transactions, you will need to choose "Payroll event form" for "Lodge & View" as shown below:
   
    

Please take note of the following:

In some instances, the linking to other businesses may take overnight to process your request.

If the business is appearing on your client list and is not a restricted client, you may need to remove and re-add the business and try to lodge again.

What Happens If This Isn't Done Correctly?

If you don't have the correct intermediary settings or Access Manager permissions in place, your STP submission will be rejected once it includes multiple entities.

You will see the following ATO error:

CMN.ATO.AUTH.008 – You are not authorised to submit this lodgement on behalf of the client.

How to Fix This?

Double-check that intermediary access has been correctly assigned in ATO Access Manager for all ABNs involved.

Sometimes you are able to submit your STP events; however, you then get to a point where the CMN.ATO.AUTH.008 appears unexpectedly. This occurs due to how pay events and update events work, as they work differently.

Pay Events are submitted per pay run and are linked to a specific pay schedule. These events will only include the employees paid in that particular run with that particular entity, and would have been linked to the same ABN. This means that up until now, you were likely only lodging data for a single ABN at a time, which didn't raise any issues.

When you move to an Update Event/Finalisation - typically used for EOFY finalisation or to correct previously reported data - the system pulls in all employees attached to the selected pay schedule, regardless of which employing entity they are attached to.

This means the update event attempts to lodge data for multiple ABNs in a single STP event, which the ATO will reject unless you are correctly set up as an intermediary for each of those entities.

This is why the issue may only surface at a particular point in time.

This means that prior pay events only involved one ABN at a time, but now the system is attempting to report on all entities in one consolidated event.

You need to add an additional employing entity if:

• You're paying employees under a different ABN in the same payroll file.
• The business has changed ABN, branch code, or BMS ID during the year.
• You want to separate employees under the same ABN using different branch codes.

Important Warning:

If you have processed a payrun that has been lodged to the ATO you should not update the ABN/Branch Code or BMS ID within the business file Business Settings. You will need to add an additional employing entity. If an error has occurred, please contact support or view the guide here on how to fix this: https://help.employmenthero.com/hc/en-au/articles/17426670752783-Manage-STP-reporting-if-your-ABN-changes