same work. Annualised salaries, allowances and overtime rules are common problem areas, particularly where managers have discretion to override system controls. System configuration drift Even when the same time & attendance or payroll technologies are used, configurations rarely align. Pay codes, accrual rules and penalty logics may differ, creating discrepancies that are difficult to detect until employees are paid incorrectly. Data integrity gaps classifications, incomplete leave histories and poorly documented payroll adjustments. Investigating these gaps can uncover both isolated and systematic issues. Common Payroll Risk Flags in M&A Unclear or undocumented industrial instrument interpretations Annualised salaries with no Payroll teams often inherit missing contracts, unclear
Incomplete employee records or contract documentation Payroll knowledge being concentrated in one or two individuals, and not being fully documented Early visibility of these flags allows payroll leaders to assess risk realistically and plan remediation before issues escalate. Annualised Salaries as Inherited Risk Annualised salaries are one of the most common, yet least visible, sources of payroll risk uncovered after an acquisition. Annualised salaries are generally introduced with good intentions – to simplify payroll processing, provide certainty of payroll costs and to provide employees with predictable earnings. However, the governance that surrounds these arrangements is often weak, informal or undocumented. Annualised salaries are generally based on a set of assumptions that are unique to each organisation and even each role within an organisation. These assumptions are around hours worked, overtime, penalties, allowances and patterns of work. While these assumptions may be
reconciliation evidence Manual pay adjustments without strong audit trails
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ISSUE 21 GLOBAL PAYROLL MAGAZINE
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