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Payroll Recordkeeping

Last Updated on November 28, 2017 / Benefits & Compensation, Legal Compliance, Recordkeeping


I recently received a letter from my payroll provider reminding me to download my payroll records from last year before they were purged. I thought payroll records had to be retained for a certain number of years?


You are correct – payroll records need to be maintained for at least 5 years following termination. However, it is the employer’s responsibility to maintain these records and not the payroll provider. We have heard various accounts of the length of time a third party payroll company will keep such records. To be safe, check with your provider to learn their policy on keeping records and don’t assume they are following the federal guidelines – they are not legally required to do so. Then make sure you are keeping sufficient copies of these records in accordance with federal law.

We asked our payroll provider – Think Pay – how they handle payroll recordkeeping.  Think Pay confirmed that they are not required by law to maintain records for clients beyond one year. However, they have not purged any client records in the 10 years that they’ve been in business. Plus, they send clients a CD at the end of each year containing all records for the year (including quarterly reports, tax filings, and W2s).

Recordkeeping is full of “if this, then that” situations. You will often hear us say “it depends” when asking about personnel files and recordkeeping. Keep the guesswork out of keeping your files in order and up-to-date. Strategic HR has a handy desktop reference ready to guide you on the documents you can keep together in an employee file and how long you need to keep them. Visit our HR Store to request a copy of our Recordkeeping reference.