What Should I Include in My Employee Payroll Records?
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What Employers Should Know About Employee Payroll Records

You have to keep a lot of records when you run a business. When you have employees, you must keep even more records, including payroll records.

It is important to keep your payroll records correctly. You need to know what documents to keep, where to keep them, and how long you should have them. Discover what you need to know about keeping employee payroll documents.

What are payroll records?

Payroll records are documents that have anything to do with an employee’s paycheck. The documents can be related to employment taxes, benefits, hours worked, or anything else you use for running payroll.

Why do you need payroll records?

Keeping a payroll file for each employee helps you stay organized. When you run payroll or need to look up payroll information, all the documents you need are in one place. You don’t have to search through a bunch of files to get to your payroll records.

Also, each individual payroll record contains sensitive, confidential information. Not everyone should have access to employee payroll records. It is important to maintain a payroll file that is separate from other employment information. When you keep payroll documents apart from the rest of the employee file, you can limit who has access to the information.

Where should you keep payroll documents?

You should keep employee payroll records at your business or a central records office. Put the records in a secure location. The records must be out of reach from people who are unauthorized to view them.

If you use online payroll software, you can use the system to hold most—if not all—of your employee payroll documents. If you have printed payroll information, make sure the documents are locked up and safe from damage.

What goes in a payroll file?

You should keep many documents and information in an employee’s payroll file. What is a payroll record supposed to include, exactly? In general, if something helps you run payroll for an employee, put it in the payroll file.

Payroll File Checklist

Here is a payroll file checklist of things you might keep in each employee’s individual payroll record:

What Goes Into a Payroll Record Checklist Infographic

  • Employee’s full name
  • Social Security number
  • Complete address
  • Birth date, if younger than 19
  • Sex
  • Occupation
  • Offer letter signed by you and the employee
  • Time and day when the workweek begins
  • Time clock and other time and attendance records
  • Total hours worked each day
  • Total hours worked each workweek
  • Rate you pay the employee (e.g., $10 per hour, $500 per week)
  • Regular pay rate
  • Total daily or weekly straight-time earnings
  • Total overtime earnings for the workweek
  • Additions to the wages (e.g., bonus pay)
  • Expense reimbursement forms and receipts
  • Raise documentation
  • Payroll advance agreements
  • Payroll deductions (e.g., employee benefits) and associated paperwork
  • Form W-4
  • Income withholding orders
  • Pay records such as total pre-tax and post-tax wages paid each pay period
  • Date wages are paid and the pay period covered by the payment
  • Time off history and remaining time off
  • Direct deposit authorization
  • Form W-2

The contents of the file will vary a bit between exempt vs. nonexempt employees. Some included documents also depend on the benefits your business offers.

How long should you keep payroll records?

According to the Fair Labor Standards Act (FLSA), you must keep payroll records for at least three years. These records include records of wages paid, bonuses, and payments made to benefit accounts.

Keep records that wage computations are based on for at least two years. These records include time cards, work and time schedules, and records of additions to or deductions from wages.

Your state might also have laws on payroll record retention that require you to keep documents for a longer amount of time. Check with your state to find out.

Patriot Software can help you organize your payroll records. Our payroll software allows you to see employee information and payroll history. When you add on the online human resources software, you can easily upload and store documents, and share items with employees. You can try the payroll and HR software for free.

This is not intended as legal advice; for more information, please click here.

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