The World’s First
AI-Powered Payroll Validation

Mercans introduces Enhanced Payroll Validation with AI Insights - a groundbreaking innovation that redefines payroll accuracy, compliance, and efficiency across the globe.

The Concept

Payroll Validation, Reimagined

Payroll validation has traditionally been manual, reactive, and error-prone. Errors in payroll data lead to costly corrections, compliance risks, and loss of employee trust.

Our solution combines deterministic rule engines with AI-powered anomaly detection to deliver clear, actionable insights before and after payroll processing.

Payroll validation has traditionally been manual, reactive, and error-prone. Errors in payroll data lead to costly corrections, compliance risks, and loss of employee trust.

Payroll Platform Illustration
How It Works

Enhanced Payroll Validation Framework

Mercans’ Enhanced Payroll Validation operates as a dual-phase validation framework that embeds intelligence directly into the payroll lifecycle. By combining deterministic rule engines with AI-driven enrichment, the system delivers proactive detection, contextual explanations, and actionable remediation steps.

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Input Validation (Pre-Payroll Stage)

This stage activates as soon as payroll input data is loaded. The system applies both rule-based anomaly detection and AI pattern recognition across 12 prior payroll cycles to benchmark current data.

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Duplicate Detection

Flags multiple rows for the same pay element and date range.

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Missing Elements

Identifies recurring pay elements (e.g., base salary) that suddenly disappear.

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New Elements

Flags allowances, bonuses, or pay components not previously seen.

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Spikes and Drops

Detects unusual percentage deviations from historical medians (default threshold: +30%).

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Non-Positive Value Validation

Detects pay elements that should not logically be < 0 (except for defined exceptions like leave balances).

ai Instead of cryptic flags, anomalies are passed through a Large Language Model (LLM) which generates explainable summaries and corrective hints (e.g., “Basic salary missing for Employee ID 254 - verify mapping in pay element table before re-running payroll”).
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Payroll Processing (Gross-to-Net)

Payroll runs as usual. During this step, the validation system runs concurrently with gross-to-net calculations, ensuring no additional latency in overall payroll cycle time.

Payroll Platform Illustration
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Output Validation (Post-Payroll Stage)

Payroll runs as usual. During this step, the validation system runs concurrently with gross-to-net calculations, ensuring no additional latency in overall payroll cycle time.

How it works
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Payslip Re-Creation

AI reconstructs sample payslips from gross-to-net data.

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Context-Aware Compliance Validation

LLM determines country and entity context, then validates payslips against jurisdiction-specific statutory rules (e.g., tax deductions, social contributions, overtime calculations).

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Sampling Strategy

The validation engine analyzes payroll output using a scalable
AI-driven sampling approach, with the capability to extend coverage across hundreds or even thousands of employees as needed.

ai Output anomalies are returned as business-friendly compliance insights (e.g., “Tax withholding for Employee ID 382 does not align with (Country) statutory thresholds for this period. Please cross-check tax configuration settings.”).
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Consolidated AI Insights

Input and output findings are aggregated into a single insight layer within the payroll summary report.

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Structured Output Enforcement

All anomalies follow JSON schema formatting, ensuring consistency.

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Explainability

Each anomaly is paired with “what went wrong” and “next steps.”

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Feedback Loop

Dotted-line workflow enables corrections to be applied at the input stage and payroll to be re-processed with minimal delay.

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Privacy & Data Handling

Throughout both phases
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Only Employee IDs and anomaly data are shared with AI models

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No PII (names, addresses, bank details) is processed.

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Scrubbing functions automatically remove any accidental data echoes in AI-generated text.

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Async batching, concurrency limits, and failover safeguards ensure reliability at scale.

👉 This dual-phase workflow ensures that errors are detected before payroll is finalized, compliance is validated after processing,
and clients receive actionable guidance every step of the way.
Payroll Platform Illustration

Key Benefits

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Accuracy at Scale

AI reduces human error and ensures payroll data integrity.

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Compliance Confidence

Automated statutory checks across multiple jurisdictions.

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Efficiency Gains

Faster anomaly detection shortens payroll cycles.

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Explainable AI

Actionable, human-friendly insights instead of cryptic error codes.

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Privacy by Design

Only anonymised employee IDs and anomaly data are processed. PII is excluded, and all outputs are scrubbed for safety.

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Global Scalability

Country-agnostic architecture adapts to diverse statutory frameworks.

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Client Value

Delivered at no additional cost to all Mercans clients.

Technology Behind The Innovation

Mercans’ Enhanced Payroll Validation is built on a hybrid AI architecture that integrates:

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Rule-Based Engines

Deterministic anomaly detection for predictable payroll checks.

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AI-Powered Enrichment (LLMs)

Large Language Models generate context-aware insights and actionable recommendations.

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Secure Data Pipelines

Anonymised processing with automated scrubbing ensures strict compliance with data privacy standards.

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Concurrent Processing

Runs in parallel with payroll summary generation, adding no extra processing time.

This architecture delivers a future-proof platform capable of evolving with regulatory landscapes and client needs.

Client Impact

With Enhanced Payroll Validation, Mercans clients achieve:

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Fewer Errors

Proactive detection before payroll release.

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Faster Turnarounds

Elimination of repetitive manual reviews.

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Stronger Compliance

Built-in statutory checks across regions.

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Peace of Mind

Payroll accuracy delivered with confidence.

Vision & Roadmap

Mercans is leading the industry as an AI-first payroll provider. Enhanced Payroll Validation is just the beginning:

  • Expanding validation coverage from representative sampling to comprehensive, payroll-wide checks
  • Continuous learning from client feedback to refine anomaly detection thresholds.
  • Future capabilities: automated corrections, conversational payroll Q&A, and predictive compliance alerts.
Payroll Platform Illustration

Ready to experience the future of payroll validation?

Book a Demo Today