Payroll Fraud Cost Calculator
What padded hours and buddy punching plausibly cost your business per year — calculated two independent ways, with every assumption visible and adjustable. No email required, nothing to download.
Early punch-ins, stretched breaks, a coworker clocking you in from the parking lot. 5–10 is the range worth stress-testing.
Gross hourly payroll: $359,424 / year
The industry statistic · 2.2% of gross payroll
$7,907
per year, if Nucleus Research's buddy-punching estimate holds for your crew.
Your own arithmetic · 8 min/shift
$5,990
per year of paid-but-not-worked time at the minutes you chose.
Two different methods, on purpose. The left number is an industry estimate from a firm whose clients sell time clocks; the right one is plain arithmetic on assumptions you picked yourself. If they land in the same neighborhood, believe the neighborhood.
What this does and doesn't estimate
This calculator covers time theft — the everyday leak in hourly payrolls. It deliberately does not try to predict your odds of a full payroll fraud scheme (a ghost employee, a payroll manager skimming), because turning those into a personalized annual number would be invented math. What the data does support: when a payroll scheme happens, the median case costs $63,000, runs 13 months before detection, and bleeds about $4,800 a month the whole time.
Case file · ACFE 2026 Report to the Nations
$4,800 / month
median bleed rate of a payroll fraud scheme while it stays undetected. Detection speed, not prevention perfection, is the biggest lever on the final loss.
Where the numbers come from
The 2.2%-of-gross-payroll figure is Nucleus Research's much-cited buddy-punching estimate — credible, but produced in an industry with time clocks to sell, which is why this page makes you do the arithmetic a second way instead of just quoting it. The scheme benchmarks come from the ACFE's 2026 Report to the Nations. All of it, with caveats attached, lives on our payroll fraud statistics page.
If the number bothered you
The fixes are cheaper than the leak in most cases: photo capture or GPS verification at clock-in stops most buddy punching outright — the options are ranked in the best time theft prevention software — and an hour with the payroll audit checklist tells you whether something bigger than rounding is going on. The background on what counts as time theft (and what's legal to do about it) is in our time theft guide.
Estimates, not measurements. Both methods assume the padding is real and roughly uniform, which your own punch data may contradict in either direction. Free to link or cite with attribution.