Payroll Recordkeeping Requirements: IRS, FLSA, EEOC, and State Rules

Your to-do list as a business owner seems to get longer every day. There’s one more item you’ll have to check off, and this one is part of federal law. You’re required to retain payroll records, sometimes for up to four years. 

Don’t worry. This isn’t an impossible task. This article covers the agencies that require payroll records and how long to keep payroll records.

At-a-glance: How long to keep payroll records

•  IRS employment tax records: Keep at least four years after the due date of the tax or the date you paid it, whichever is later. 
• FLSA payroll records: Keep three years (e.g., payroll, agreements); wage computation records (e.g., timecards, schedules) keep two years. 
• EEOC personnel records: Keep one year; if an employee is involuntarily terminated, keep for one year after termination. If a discrimination charge is filed, keep related records until final disposition. 
• States: Follow the longer of federal or state rules (some states require four to five years).

What are payroll records?

Payroll records is a broad term that covers all the documentation you use to track employee hours, salary, and any other information related to how they are paid. 

Here are some (but not all) of the records you need to keep track of: 

• Names, addresses, and Social Security numbers of all employees
• Workweek information (e.g., start and end dates)
• Hours worked each day/total hours worked each week
• How each employee is paid (e.g., hourly, salary)
• Pay rate
• Overtime earnings (if applicable)
• Additions to or deductions from wages
• Total wages paid each period
• Employee reported tips and allocated tips
• Payment dates and pay periods
• Forms W-2 and W-3
• Forms W-4 and W-5
• Form 941 or 944
• Records of benefits
• Copies of filed returns with confirmation numbers

There’s a chance that there are other payroll records you need to keep, like travel vouchers or receipts for employee reimbursements. 

To be clear, payroll records can include records for employment taxes and records showing how you determined employee wages.

How long to keep payroll records

Three federal agencies require you to keep employment payroll records. There’s just one problem: different agencies have different records they want you to keep with different lengths of time for you to keep them. 

Read on to see the breakdown.

IRS

The IRS requires that you keep payroll records such as amounts and dates of wages, dates of employment, and dates and amounts of tax deposits. 

Keep these records for four years after the due date of the tax or the date you paid it, whichever is later.

You should also know how long to keep business records like those related to income tax returns. In practice, this includes items like Forms W-4, W-2/W-3 copies, Forms 941 or 944, tax deposit confirmations, records of reported tips, fringe benefits, and any adjustments or credits. Some tax credit documentation may warrant retention beyond four years. Consult your tax advisor for more information.

Fair Labor Standards Act

The Fair Labor Standards Act (FLSA) requires that you keep identifying information on each employee as well as information about their hours and pay rate (e.g., employee gender and occupation, total hours worked each workweek and regular hourly pay rates). 

Keep records concerning payroll, collective bargaining agreements, as well as sales and purchase records for at least three years. Keep records used to calculate wages for two years. 

Wage computation records commonly include timecards or timesheets, work and time schedules, piecework or commission records, and any documentation used to determine straight-time and overtime pay

Equal Employment Opportunity Commission

The Equal Employment Opportunity Commission (EEOC) requires that you keep detailed employment records (e.g., employee applications and any records dealing with promotions, demotions, or terminations). If needed, these records can prove or disprove an employee was discriminated against when they were fired.

Keep records concerning employment (hiring, promotion, demotion, or termination) for one year after the record was created; if an employee is involuntarily terminated, keep for one year from the date of termination If someone files a charge of discrimination under Title VII, the ADA, or GINA, hold on to all records related to the charge until the final disposition of the charge. 

State requirements

Some states may require that you hold on to payroll records a bit longer. For example, California and Arizona require four years, while Montana requires you to keep records for five. 

To make things a bit more complicated, states might also have different requirements on what type of records you need to keep. Check with your state for specifics. 

As a rule of thumb, follow the longer retention period when federal and state rules differ.

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Special cases and audit-readiness

Terminated employees: Retain records per the applicable agency’s timeline (e.g., IRS four years; EEOC one year after termination if involuntary; FLSA three years for payroll records and two years for wage computations), or longer if a claim, audit, or investigation is pending. 

Centralized recordkeeping: If you maintain records offsite or centrally, the Department of Labor can require you to make them available within 72 hours of notice. 

Minors and youth employment: Keep required identifying details (including birth date if under 19) and time records consistent with FLSA retention rules.

Storing payroll records

It’s up to you how you store your payroll records. You can use hard copies in locked filing cabinets if you’d like. But, storing payroll records online can help protect them from getting lost or damaged. 

Electronic vs. paper: practical tips

Ensure records are accurate, legible, and retrievable for the full retention period. 

Protect sensitive data (e.g., SSNs) with role-based access, encryption, and secure backups. 

Keep a clear retention schedule and document destruction policy; pause destruction if litigation or an audit is pending. 

If you scan paper records, confirm the images are complete and can be reproduced on request.

Payroll solutions from Patriot Software

Patriot Payroll® helps you keep compliant, organized records without the manual hassle: 

• Secure, cloud-based storage and role-based access to protect sensitive data 
• Built-in payroll reports (tax filings, wages, deductions, hours) that align with IRS and FLSA record types
• Exportable filings and deposit confirmations for audit-readiness 
• Optional HR add-on to track personnel actions (e.g., promotions, terminations) for EEOC compliance

Get started with Patriot Payroll to simplify recordkeeping and reduce compliance risk.

FAQs: Payroll recordkeeping requirements

Interested in a better way to handle payroll and HR tasks? Sign up for Patriot Software to get a free trial of our payroll software and HR software add-on today.

This article has been updated from its original publication date of June 1, 2011.