# How to transfer leave provision from one company or related entity to another

KB143

### Overview

Sometimes you have two entities and you transfer employees from one to another. If they are different legal entities, then you are effectively terminating and re-employing staff, so the transfer of provision is done using pay runs.

The company that is taking on the new employee may need to recognise their leave entitlement – that is, they will have the same leave in the new company as they did with the old company. This means the new company will be taking on a sudden debt. The process below shows how to account for leave in the new company.