How Long Do You Have To Keep Payroll Records?
Discover the Optimal Timeframe for Maintaining Your Payroll Records
Maintaining organized payroll records is essential for any business, but determining how long to keep them can be challenging. Certain payroll records, such as pay grade increases, timecards, schedules, and wage rate tables, can be disposed of after two years. However, the majority of your payroll records should be kept for at least three years to comply with recordkeeping requirements. As your staff size increases, the volume of payroll records can quickly become overwhelming. To help you decide which records to keep and which to dispose of, we’ve outlined the recommended retention periods for different types of payroll records. Discover the optimal timeframe for maintaining your payroll records and free up space in your office.”
Why Is Keeping Payroll Records Important?
Discover the Importance of Payroll Recordkeeping and How Long to Keep Them
Understanding the significance of proper recordkeeping is crucial before determining how long to keep your payroll records. Complying with federal, state, and local laws, payroll records are essential for any business to avoid legal complications. Failure to keep these records not only results in law-breaking but also puts your business at significant risk of losing time, money, and energy in case of audits, lawsuits, or other legal actions. Protect your business by ensuring you retain your payroll records for the required period. The question remains, what is the appropriate duration for retaining these records? Let’s find out.
Payroll Records To Keep For Two Years
Payroll records are crucial for any organization, but did you know that different types of payroll records have varying retention requirements? As per the US Equal Employment Opportunity Commission (EEOC), employers must retain pay grade increase records for at least two years. Similarly, the US Department of Labor (DOL) Wage and Hour Division allows offloading of records based on wage computations, including timecards, work and time schedules, and wage rate tables, after two years. It’s worth noting that even at the two-year mark, there are very few payroll records you can dispose of, so it’s essential to keep track of retention requirements.
Payroll Records To Keep For Three Years
Learn about the Fair Labor Standards Act (FLSA) record retention requirements and how to stay compliant with the Department of Labor (DOL). While some records can be offloaded after two years, employers must retain most payroll records for at least three years. This includes essential employee information such as their name, social security number, address, occupation, and wages paid. The USCIS requires employers to keep I-9 forms for at least one year after termination or three years after the date of hire. Don’t worry about the form used for recordkeeping as long as it contains all the necessary information. Keep your records organized and accessible to ensure compliance with FLSA regulations.
How Long Does The IRS Require You To Keep Payroll Tax Records?
To comply with IRS regulations, it’s important to retain all employment tax records for a minimum of four years. These records should include your employer identification number, wage and pension payments, tips reported, in-kind wages, employee information, undelivered W-2 forms, employment dates, sick or injury pay, tax deposits, filed returns, allocated tips, and fringe benefit records. It’s crucial to keep these records on hand and available for IRS review if necessary.
Want To Play It Safe? Keep All Your Payroll Records For Six Years
Managing payroll records and determining their retention period can be a daunting task, especially for companies with a large workforce. While the duration for maintaining records varies depending on the type, it’s advisable to keep payroll records for at least six years, as recommended by the Small Business Association (SBA). This is because various federal government agencies, states, and local municipalities may have different regulations regarding record-keeping. Adhering to a six-year retention period ensures compliance with all relevant employment laws and provides protection to your business in case of any record requests. Stay compliant by using this comprehensive payroll records checklist.