Payroll fraud takes many forms and new threats emerge all the time. Some scams exploit weaknesses and blind spots within your business and payroll systems, and some undermine from outside.
The key is to know what to look for and have a payroll system and process designed for transparency and oversight.
Seven common types of payroll fraud
- Impersonation scams – external parties access employee information through email or ‘phishing’ and redirect employee funds.
- Supplier collusion – contractors inflate their claim for hours worked or manipulate financial data to receive performance-based bonuses.
- Unpaid Advances – an employee requests an advance on their pay and then never repays it.
- Ghost employees – payroll staff create a fake employee profile and redirect fraudulent payments to their own account.
- Pay rate alteration – employees collude with the payroll administrator to increase the level of their hourly rate in the payroll system.
- Buddy punching – employees punch each other’s hours into the company time clock to claim un-earned wages.
- Unauthorised hours – employees pad-out time sheets, usually in small enough increments to escape the notice of managers.
Don’t forget to watch the video presentation from Jacqui Birch, Aurion BPOS payroll expert, on the nature and common types of payroll fraud.
Download the Aurion Guide to Fraud-Proof Payroll
Is your payroll secure – or are you losing money or business-critical data without even knowing it? The Aurion Guide to Fraud-Proof Payroll will help you identify various types of payroll fraud and provide strategies to prevent payroll fraud from impacting your business.
We help you to:
- Identify common types of payroll fraud
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Learn simple payroll fraud prevention techniques
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Build strategies to fraud-proof your payroll service

About the Author
Nick Ransley
Content Creator
Nick researches and writes quality content that educates our community about current and emerging Payroll & HR trends. This requires building solid relationships with internal and external stakeholders to understand issues, products, and the wider Payroll & HR landscape.