Do I need to save payroll records?

small chest save payroll records

You may never have given too much thought to the saving of your payroll records. There will be many times that you need them. Here we will share with you our recommendations regarding the saving of your payroll records.

We’ll consider the answers to these questions:.

  • Why should you save your payroll records? 
  • When should you save your payroll records?
  • How can you find your payroll records? 
  • Where should you save your payroll records?
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Why save

The more documentation the better. Your payroll records document and support the payroll expenses claimed on your tax returns.  They give evidence of your compliance with filing and paying your payroll taxes.

There are other situations when you could be required to provide payroll records. Some of these occasions could be:

  • Workers’ compensation audit
  • General liability audit
  • Current or former employee request

When to save

You could find yourself scrambling if you wait for a request to prompt you to find your payroll records. We recommend saving payroll records at least quarterly. If you do this regularly you will avoid a lot of stress.

What to save

What payroll records should you save? We recommend saving as much documentation as possible.

Some payroll records you want to be sure to save are:

  • Detailed payroll journals
  • Federal tax filings (Forms 941 and 940)
  • State tax filings (if applicable)
  • Wage and Tax Statement forms (W-2s)
  • Employment Eligibility Verification forms (Form I-9)
  • Tax withholding forms (Form W-4)
  • Employee timesheets

Find out more about which payroll records you are legally required to keep and how long you need to save them by referencing information published to the IRS and Department of Labor websites.

How to save

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How can you find the payroll records you need? If you are filing your payroll taxes yourself, the best way to save the payroll records is when you are filing them. Be sure that the person responsible for this in your office knows that these should be saved.

If a payroll service files payroll taxes on your behalf, you will need to log into your payroll service portal and locate where the records are saved. Look for tabs with names like “Documents” or “Reports”. From there you should be able to download what you need.

Where to save

Once you have located your payroll records, be sure to save the documents in a secure location and well-organized manner. Digital records are easier to find later and send to others when needed, so consider saving digital copies or scanning paper documents. Payroll records contain sensitive information so be mindful of keeping this information secure.

Saving your payroll records regularly means not having to scurry later to locate the documents that you need and will alleviate stress. Visit our year-end resources page to see what else can be done to alleviate unneeded stress.