Payroll and Anti-Money Laundering: The Responsibility You Didn’t Know You Had

When we talk about Anti-Money Laundering (AML), most people picture banks, cryptocurrency exchanges, or high-risk financial institutions, not payroll teams quietly working behind the scenes to ensure people are paid correctly and on time.

But here’s the reality: payroll professionals are on the frontline of financial integrity, and yes, that includes AML.

🕵️‍♂️ Why AML Matters in Payroll

While payroll is not currently a regulated activity under the UK’s Money Laundering Regulations, it involves significant outbound payments, sensitive financial data, and access to personal identifiers, all of which can be exploited to disguise the movement of illicit funds.

Some examples we’ve seen (or could see) in real-world payroll environments:

• Ghost employees added to payroll by internal bad actors.

• Unusual bonuses or “ex gratia” payments that go unquestioned.

• Shared bank accounts across multiple employees.

• Multiple bank account changes without documented cause.

Criminals aren’t picky, they use whatever channel is weakest, and that’s often a process assumed to be ‘routine.’

🚩 Payroll Professionals: What Are Your Responsibilities?

Whether you process 10 or 10,000 payslips a month, you have a duty to:

• Know what suspicious activity looks like

• Ask questions when something doesn’t feel right

• Document anomalies and escalate where necessary

• Follow your organisation’s Suspicious Activity Reporting (SAR) process

• Avoid “tipping off” anyone under suspicion, this could be a criminal offence under the Proceeds of Crime Act 2002

Even if you’re not an AML officer, your vigilance matters.

🔧 How to Build AML Awareness into Payroll Culture

• Include AML red flags in your payroll induction and training

• Create space for questions, not just processes

• Share scenarios in team meetings and talk about how to respond

• Reinforce due diligence with checklists and approvals

• Collaborate with HR and finance to keep control tight and transparent

Culture is key. When people are encouraged to speak up, spot red flags, and challenge unusual instructions, payroll becomes part of the organisation’s defence, not its vulnerability.

You don’t have to be an investigator to make a difference.

You just need to be a payroll professional who’s alert, ethical, and informed.

Because in the fight against financial crime, the people processing payroll may be the first, and last, line of defence.

Want to know more?

Join our AML in Payroll workshop

✅ “Red Flags for Payroll Professionals”