Maker-checker payroll: why the person who runs payroll should not release it

Maker-checker means one person prepares a payroll run and a different person approves or releases it, so no single user can both create and pay. It is the main control against payroll errors going unnoticed and against payroll fraud.

The risk it addresses

Payroll is both the largest recurring payment a company makes and one of the easiest to alter quietly: a changed bank account, an inflated allowance, a ghost employee. If one person can prepare, approve and pay a run, nothing in the process would catch an honest mistake or a dishonest change before money moves.

Which steps to separate

  1. Prepare: compute the run from attendance, leave and salary data.
  2. Lock: review the output, checking variances against the previous month, and freeze it.
  3. Release: authorise payment to the bank.

The strongest minimum is that the person who prepared a run cannot lock it, and the person who prepared or locked it cannot release payment.

Supporting controls

  • Changes to bank details, salary structures and statutory numbers are themselves approved by a second person.
  • A locked run cannot be recomputed; corrections go through a supplementary run so there is a record.
  • Every step is logged with who did it and when, in an audit trail that cannot be edited.
  • The bank file total is reconciled to the run’s net pay before upload.

Small teams

A company with a single payroll administrator cannot separate three roles, and a rule that blocks them from ever finishing a run is worse than none. The practical approach is to make the separation a setting: switch it on once you have a second person — a finance head or founder — who can act as the checker, and until then rely on the audit trail and the bank reconciliation.

Frequently asked questions

What is maker-checker in payroll?

A control where one person prepares a payroll action and a different person approves it, so no single user can create and release a payment alone.

Which payroll steps should be separated?

At minimum, preparing the run, locking (approving) it and releasing payment. The preparer should not lock it, and neither the preparer nor the locker should release payment.

Can a very small company use maker-checker?

Only once there is a second person who can act as the checker. Until then, a complete audit trail and bank-file reconciliation are the practical controls.