Discover practical tips to prevent payroll fraud, from ghost employees to fake companies using stolen FEINs. Learn how TBM Payroll combines compliance-focused technology with the human touch to protect your business.

Payroll fraud occurs when employees or outsiders manipulate payroll systems for financial gain. It can range from falsified timesheets to sophisticated schemes involving stolen Federal Employer Identification Numbers (FEINs). According to TBM Payroll, fraud prevention is about more than software—it’s about compliance, vigilance, and human oversight.

Common Payroll Fraud Risks

• Ghost employees: Fake or former employees still receiving paychecks.

• Inflated hours or overtime: Staff exaggerating work hours on timesheets.

• Misclassification of workers: Incorrectly labeling employees as contractors to avoid taxes.

• Unauthorized changes: Adjustments to pay rates or benefits without approval.

• Compliance errors: Mistakes that can trigger IRS audits.

• Fake companies using stolen FEINs: Fraudsters may set up shell companies using an existing FEIN and redirect payroll funds by changing pay accounts. This advanced scheme can siphon money undetected unless payroll records are closely monitored.

Tips to Prevent Payroll Fraud

• Segregate duties: No single person should control the entire payroll process.

• Conduct regular audits: Internal reviews catch discrepancies early.

• Use secure payroll systems: Invest in fraud detection features.

• Verify employee and company records: Confirm legitimacy of all employees and accounts.

• Stay compliant: Partner with payroll providers like TBM Payroll that prioritize IRS compliance and risk management.

The Human Touch in Payroll Services

Technology alone isn’t enough. TBM Payroll emphasizes the human touch in payroll services:

• Personalized compliance guidance: Experts interpret complex IRS rules.

• Employee onboarding support: Smooth integration reduces fraud risks.

• Relationship-driven service: A dedicated team that knows your business can spot irregularities software might miss.

Why Choose TBM Payroll

TBM Payroll blends compliance-focused technology with hands-on support, ensuring businesses avoid fraud while fostering accountability. Their approach underscores that payroll is about people as much as processes.

Payroll Fraud FAQs

Q: What is the most common type of payroll fraud? A: Ghost employees—fake or former staff still receiving paychecks.

Q: How can businesses prevent payroll fraud? A: By segregating duties, auditing regularly, verifying records, and partnering with trusted providers like TBM Payroll.

Q: What is FEIN fraud in payroll? A: Fraudsters may use stolen Federal Employer Identification Numbers (FEINs) to set up fake companies and redirect payroll funds.

Q: Why is the human touch important in payroll services? A: Human oversight ensures compliance, detects irregularities, and builds trust beyond what software alone can provide.