The Risks of Relying on One Person to Run Payroll

Why does a payroll specialist’s absence become a business risk?

Pay statements must go out on schedule each month, and withholding tax and social insurance filings must be completed on time. Those deadlines do not move when the person responsible is away. If only one employee knows the calculation rules and procedures, even an unexpected absence of a few days can disrupt the payroll close.

This is not a question of that employee’s ability. The risk lies in an operating model with no documented procedures, reviewer, or backup. As leave arrangements become more flexible, payroll operations need to let the person responsible take leave without putting the pay cycle at risk.

In the second half of 2026, access to family-related leave expands while the statutory maximum penalties for unpaid wages and retirement benefits rise. Payroll specialists are employees who may need to use these leave arrangements themselves. Employers therefore need a way to keep payments and filings on track regardless of who is present.

Family-related leave expands in 2026

Several changes in the second half of 2026 give employees more flexibility to respond to short-term childcare needs and circumstances surrounding a partner’s pregnancy and childbirth.

Payroll specialists are not exempt from these needs. Short-term parental leave can apply when a child’s school closes, during a school break, or when illness creates an unexpected care need. Leave connected to a partner’s childbirth may also overlap with payroll deadlines. A workable leave policy must allow the employees who administer it to use it.

Why timely and accurate payroll matters even more

The statutory maximum penalty for failure to pay retirement benefits increased on September 18, 2026, from up to three years’ imprisonment or a KRW 30 million fine to up to five years or KRW 50 million. The same increase for unpaid wages is scheduled to take effect on October 8, 2026.

Legal responsibility rests with the employer. Withholding tax, social insurance, year-end tax settlement, and retirement benefit administration also run on firm schedules. An absence or error by one specialist can lead to missed payments or filings. Stronger penalties make it more important for employers to control deadlines and processes systematically, rather than relying on one person’s knowledge.

According to Ministry of Employment and Labor figures for July 2026, KRW 1.0814 trillion in total unpaid amounts, including KRW 527.8 billion in unpaid wages and KRW 491.9 billion in unpaid retirement benefits, approximately 94% combined.

The risk is dependence on one person, not the person themselves

When the sole payroll specialist is away, no one else may know where the source data is stored, who needs to be included in that month’s filings, or how exceptions are handled. Planned leave, sudden illness, and an unexpected departure can all expose the same weakness.

In many organizations, the same person prepares and checks the payroll. Without a separate reviewer, there is no second opportunity to catch an error. Rules for exceptional cases, special allowances, annual leave, and other absences may also live only in someone’s memory or personal spreadsheet. Essential calculation logic becomes individual know-how rather than an organizational resource.

A missing change and approval history creates another gap. If the reason for an adjustment and the person who reviewed it are not recorded, that reasoning disappears when the specialist changes. Payroll stops during an absence because the process was built around one person, not because that person took leave.

Four conditions for payroll continuity

1. Standardize processes and calculation rules

Document allowance calculations, exception rules, and the treatment of leave and other absences in procedures and systems. Keep monthly filing and payment calendars, employee joiner and leaver information, leave and return-to-work records, and month-over-month pay changes current. Another qualified person should be able to follow the same rules.

2. Separate preparation from review

The person who calculates payroll should not be its only final checker. If a business cannot staff two dedicated payroll roles, it can arrange for another manager or external specialist to review the final output. Independent review is a basic safeguard against errors.

3. Establish a backup and handover process

Absences are not limited to planned vacation. Maintain an up-to-date procedure manual, clear locations for source files, and a handover checklist so a trained backup can continue the cycle when someone is suddenly unavailable.

4. Maintain an audit trail of calculations, changes, and approvals

Record who changed payroll data, when, and why, along with the related review and approval. An audit trail helps teams find and correct errors and preserves the reasoning behind earlier decisions when responsibilities change hands.

How HCG Payroll Outsourcing supports continuity

Organizations that cannot put all four safeguards in place with internal resources can reconsider how payroll is operated. Drawing on its experience building and running HR systems, HCG Payroll Outsourcing provides specialist support for payroll calculations, social insurance, withholding tax filings, and year-end tax settlement, with a separate review step.

The service separates preparation from verification and records company-specific rules in the system and formal operating procedures. This reduces dependence on one employee’s experience and helps payroll continue when an internal specialist is unexpectedly away. Outsourcing does not transfer the employer’s legal responsibility. It provides a practical operating structure to help prevent errors and meet deadlines.

If payroll knowledge and responsibility are concentrated in one person, speak with the HCG Payroll Outsourcing team about how to document, review, and share the work.