Charges of workplace embezzlement can happen for different reasons. Sometimes a payroll administrator decides to take advantage of the position and steals company money for personal enrichment or to give to friends. This kind of theft can do serious damage to a business.
The Motley Fool describes different schemes an embezzling payroll administrator can enact against a company.
Raising pay without authorization
Some fraudsters raise the salary or wages of an employee without receiving approval from an employer. Sometimes these raises are easy to spot if the amounts are large. Crafty administrators tend to keep unauthorized raises low to evade detection. Another tactic is to give out unauthorized bonus payments.
Skimming off taxes
Sometimes fraudsters take money from the taxes they should have withheld from the paycheck of an employee. Instead of sending income and payroll taxes to the government, they skim the money for themselves. This is especially problematic as it could put a company in trouble with the IRS.
Paying nonexistent employees
Using a ghost employee is another form of embezzlement. A fraudster can set up an employee on the payroll who does not actually exist. In reality, the embezzler is sending payments to a relative or is personally collecting the money.
Ways to combat payroll embezzlement
Companies try to prevent theft on the payroll by instituting different measures such as payroll audits and making it mandatory for payroll administrators to go on vacation. A business can also split payroll responsibilities between multiple workers to create checks and balances. These measures may help an honest administrator avoid suspicion if authorities suspect payroll fraud has taken place.