Tracing Bank Accounts Becomes Key To Exposing Payroll Fraud As Losses Mount Across South Africa

If you have a system where the head of HR or Finance can log in remotely and generate reports, you remove that isolation

JOHANNESBURG, South Africa, December 4, 2025/APO Group/ --

Payroll fraud creates considerable losses for South African companies and taxpayers. The Public Servant Association revealed that ghost employees are costing the public purse nearly R4 billion. The Chartered Institute of Payroll Professionals estimated that payroll fraud steals at least R100 million annually from businesses and represents roughly 10% of business fraud cases.

Yet, these are not the activities of mastermind criminals. Payroll fraud is often incredibly basic. But when there are dozens to thousands of employees on the books, detecting these crimes can be resource- and time-intensive.

Diligent monitoring, audits, and face-to-face confirmation campaigns will expose and discourage payroll fraud. But these approaches are often also resource intensive. Fortunately, there is another method that works well in the short term: checking bank account details.

Bank accounts don't lie

Payroll criminals manipulate employee information. They can load ghost employees onto systems as new hires or edit existing records, such as those of departing employees, rather than remove them. They can abuse the profiles of infrequently paid employees such as contractors and freelancers, skimming money when legitimate payments aren't due or adding inflated charges that are diverted to a different account.

They can also change banking details right before and after payroll runs, hoping to avoid detection since such changes can sidestep proper processes, hide inside dense financial records, and not show up unless there is an audit of payroll activities.

In all of these abuses, changes to banking details are the common thread, says Yolande Schoültz, founder of YSchoültz Attorneys | Conveyancers | Notaries.

"For payroll fraud to work, money to be misappropriated and to be fraudulently paid over to a bank account, there must be a change in banking details."

Fraudsters alter payroll details, concealing their activities behind legitimate profiles and their role as system gatekeepers. However, most don't go as far as to forge relevant documents such as bank confirmation letters. When organisations have processes that dictate how to legitimately change employee bank details, they will keep those documents on file. Looking for those anomalies will expose payroll fraud.

Each month, check the new employees and terminations. The new employee records should have corresponding bank documentation reflecting their banking account details. The records of former employees should not have new banking details. If you compare those groups with the documents you have on file, you'll uncover irregularities.

"Even if that's the only verification you do, you are still mitigating payroll fraud," says Schoültz.

Signs of potential payroll fraud include:

• New employees on payroll with no or lacking corresponding banking documentation
• Profiles of terminated employees that are still active
• Bank account changes on profiles of employees that receive infrequent or variable payments
• Altered banking records with no corresponding documentation or requests
• The same bank account details appearing on multiple records
• Changes to banking details right before and after payroll runs

Monthly spot checks on new employee additions, or banking changes to terminated and infrequently paid employees, will show fraud patterns if there are any. Also conduct quarterly or biannual audits of payroll records, specifically looking for changes to banking details.

Simplifying fraud detection with technology

Why aren't organisations conducting these checks? The first issue is that management of payroll departments is often ambiguous. Do they fall under finance or human resources?

"Should payroll be a part of HR or finance? It's not either of the two; it's both, with finance taking the lead. Nevertheless, payroll can often operate independently from finance. When requests for verifications arise, they simply export a file and forward it to finance, which often accepts it without further scrutiny," says Schoültz.

The second is that conventional payroll software is typically isolated from people who should have oversight authority. Many companies still rely on payroll software that is at least 10 years old and typically lacks modern features such as remote access, ad hoc reporting, and integration with other business systems.

Modern payroll software that provides role-based access is a potent deterrent against payroll fraud because it removes barriers complicating payroll oversight, says Sandra Crous, MD of South African payroll and HR platform Deel Local Payroll.

"If you have a system where the head of HR or Finance can log in remotely and generate reports, you remove that isolation. They don't need to go through the payroll staff to see what is going on. And if they use these measures to regularly check on new and terminated employees, emphasising bank account changes, they'll uncover and discourage payroll fraud."

Payroll fraud may lack sophistication, but its cumulative impact is devastating. Vigilance over bank account details is a simple yet effective way to expose and discourage these crimes. By scrutinising banking detail changes and leveraging modern payroll software for oversight without bottlenecks, organisations can dramatically reduce their vulnerability to payroll fraud.