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Updated Jul 10, 2024

Requirements for Keeping Paycheck Records

Employers keep paycheck records to meet state and federal storage requirements. Here's how to manage and store records that pertain to payroll.

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Julie Thompson, Senior Writer & Expert on Business Operations
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Federal law requires employers to keep payroll records for three years and copies of payroll taxes for four years. However, depending on your state, you may be required to keep payroll records for as long as six years. While you can store these documents in paper form, electronic payroll record storage is a much better choice, helping you stay organized and create a meticulous paper trail. 

We’ll walk you through the different types of paycheck records, state and federal storage requirements, as well the different ways your business can manage records to avoid unnecessary employee issues, awkward meetings with your accountant and IRS audits.

Editor’s note: Looking for the right payroll software for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

What are paycheck records?

Paycheck records are all the documents associated with payroll. They may include onboarding documents, direct deposit authorization forms, pay stubs and documents related to employee benefits

Payroll records also include personal employee information, such as pay rates, tax deductions and whether employees are paid hourly wages or a salary.

Paycheck recordkeeping FAQs

Keeping paycheck records for more than the required length of time can put employers at risk for data breaches and encourage fraudulent activity. Therefore, all financial and personal employee information, including credit reports, Social Security card images and bank account information, should be destroyed quickly after the retention time frame. However, if you receive questions about destroyed documents, it's wise to keep a list of paycheck record dates and when you got rid of them.
While most states follow the retention requirements set by the IRS and the United States Department of Labor, a few have taken additional steps to refine payroll records retention policies. States with exceptions include California, Illinois and New York:
  • California: Payroll records must be kept for six years.
  • Illinois: Payroll records must be kept for five years.
  • New York: Payroll records must be kept for six years.
Yes. Payroll records should be kept for each worker, including full-time and part-time employees and should include detailed worker information, hours worked and wages received.
Payroll systems must track hours worked, wage calculations, tax withholdings, specific deductions, auto payment of government employment taxes and printing and delivering checks.
No. Employees must be paid for all hours worked, regardless of whether they used the time clock properly. Timecard issues should be resolved before the next payday to prevent further payroll issues.
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Julie Thompson, Senior Writer & Expert on Business Operations
With nearly two decades of experience under her belt, Julie Thompson is a seasoned B2B professional dedicated to enhancing business performance through strategic sales, marketing and operational initiatives. Her extensive portfolio boasts achievements in crafting brand standards, devising innovative marketing strategies, driving successful email campaigns and orchestrating impactful media outreach. Thompson's proficiency extends to Salesforce administration, database management and lead generation, reflecting her versatile skill set and hands-on approach to business enhancement. Through easily digestible guides, she demystifies complex topics such as SaaS technology, finance trends, HR practices and effective marketing and branding strategies. Moreover, Thompson's commitment to fostering global entrepreneurship is evident through her contributions to Kiva, an organization dedicated to supporting small businesses in underserved communities worldwide.
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