Payroll Record Retention: What To Keep, What Formats to Keep in & For How Long to Keep it?

Payroll is one thing that all businesses have in common. Along with processing payroll come many different payroll records required to process the payroll.  Each type of record has different requirements for how long you must retain those records. Payroll departments receive and submit hundreds of thousands of bits of data every year. Employee master file data such as name and social security number, employee forms such the Form W-4, report to the IRS such as Form 941, state unemployment insurance quarterly returns, termination dates for employees, and even child support withholding orders. A critical question that every payroll professional must ask and more importantly answer is “What am I required to keep, in what format, and for how long”?

This webinar will give you guidance on how long each type of record must be retained according to IRS and State guidelines. The time over which payroll records must be retained will depend upon government requirements. The Internal Revenue Service typically states a required retention period in each document it issues dealing with payroll issues. In general, wage calculations should be retained for two years, while collective bargaining agreements should be retained for three years.

• To discuss the types of payroll records that must be retained.
• To analyze the requirements for each type of payroll record. 
• To inspect how long payroll records must be kept.
• To different State requirements for record retention.
• To discuss information and guidelines by specific states with different requirements.

Avoid Liabilities-Payroll Record Retention

I. Types of Payroll Documents

• 941 & 940 Tax Forms
• W-2’s-Original and Undeliverable W-2’s
• Timesheets and Piecework
• Schedules
• Records for Additions/Deductions from Wages
• Wage Tables, Collective Bargaining Agreements
• State Taxes
• Local Taxes
  
  

II. Retention of Documents

• All IRS Tax Returns and W-2’s
• Time Records
• Payroll records, Collective Bargaining Agreements, Sales/Purchasing Records
• State and Local Tax Returns
  
  

III. Specific State Laws

• New York
• California
• Illinois
• Washington

Payroll record retention is essential for compliance with labor laws, tax regulations, and audits. Employers must maintain accurate records, including wages, deductions, hours worked, and tax filings, in secure and accessible formats. Retention periods vary, with the IRS requiring at least three years and the Fair Labor Standards Act mandating two years for certain records. Proper retention helps businesses stay compliant, avoid penalties, and mitigate legal risks.