When it comes to managing payroll records, one of the most common questions businesses ask is, “How long does a business have to keep check stubs for?”
The answer varies depending on several factors, including legal requirements and best practices for financial record-keeping.
At Check Stub Maker, we understand the importance of accurate and efficient payroll management. Our pay stub generator simplifies this process, ensuring that your business stays compliant and organized.
In this blog post, we’ll explore the recommended duration for keeping payroll documentation like check stubs and the best methods for storage.
Let’s get started!
What this article covers:
- How Long Should an Employer Keep Paycheck Stubs?
- How Should You Store Payroll Records?
- Cost of Non-Compliance
How Long Should an Employer Keep Paycheck Stubs?
Based on our first-hand experience, there are various legislative stipulations for the retention of employee records which is determined by what they’re ultimately used for.
Table: Employee Record Keeping Requirements And Guidelines For Employers
|Internal Revenue Service (IRS)
|Employment Tax Records
|At least 4 years after tax is due or paid (whichever is later) for medium-sized to larger employers.
At least 3 years for smaller employers.
|Includes any documents related to tax filing and returns.
Documents should be kept for 6 years if unreported earnings are greater than 25% of gross income.
|Equal Employment Opportunity Commission (EEOC)
|Personnel or Employment Records
|At least 1 year from the date of terminating employment
|Applies to all employers.
It’s also specific to cases of involuntary termination.
|Fair Labor Standards Act (FLSA)
|Monthly Statements and Pay Stubs
|At least 1-2 years
|Any payroll documents can be kept by employer in this instance if they’re related to hourly pay rates and wage computations.
Can be shredded after retention period ends.
According to the Internal Revenue Service (IRS), employers (medium-sized to large) are advised to keep employment tax records for at least four years after the tax becomes due or is paid (whichever comes later).
As per our expertise in payroll at Check Stub Maker, these records include paystubs and time (hours worked), which are crucial for verifying the accuracy of tax submissions.
If you’re wondering how long to keep copies of paystubs, the Equal Employment Opportunity Commission (EEOC) and the Fair Labor Standards Act (FLSA) have specific recordkeeping requirements.
In cases of involuntary termination, records should be retained for a minimum of one year from the date of termination. For small businesses, the guidelines are similar.
We recommend keeping all your financial documents, including tax forms and paycheck stubs, for at least four years overall as per the IRS’ requirements.
However, if there are unreported earnings that are more than 25% of the gross income shown on your return, it’s better to keep records for at least six years.
For a simpler alternative, use our pay stub generator at Check Stub Maker to organize all your important payroll information on a single platform.
How Should You Store Payroll Records?
Based on our observations, there are three common ways to store document retention policy check stubs.
While digital storage is becoming more prevalent, some smaller to medium-sized businesses still maintain payroll records in paper form.
If you choose to keep physical copies of paycheck stubs, it’s essential to have a secure and organized filing system.
We suggest using locked filing cabinets and limiting access to authorized personnel only. This method not only protects sensitive information but also ensures that records are easily accessible for audits or reference.
The shift towards digital record-keeping offers enhanced security and easier access, which we highly recommend.
Based on our first-hand experience, digital copies of check stubs can be stored on secure servers or cloud-based systems like ours at Check Stub Maker.
We ensure that our digital storage solution complies with data protection laws and provides adequate backup and recovery options.
Digital records are space-efficient while also allowing for quicker retrieval and better organization.
Not to mention, this is also a much more environmentally-friendly approach.
For optimal efficiency and compliance, using payroll management software is highly recommended. Software solutions, like those offered by us, not only help you create pay stubs that are accurate but also store them securely.
The duration for keeping check stubs varies based on legal requirements, typically ranging from one to four years.
The method of storage—be it paper files, digital formats, or through specialized software—plays a crucial role in ensuring compliance, security, and ease of access.
At Check Stub Maker, we’re committed to providing solutions that cater to these needs, ensuring that your business’s payroll management is seamless and compliant.
Cost of Non-Compliance
Non-compliance with payroll record-keeping regulations, including the retention of check stubs, can lead to significant costs for businesses.
Each state has its own set of laws which can vary widely in terms of requirements and penalties. Failure to comply with these laws can result in fines, legal disputes, and damage to a company’s reputation.
Moreover, federal agencies like the Equal Employment Opportunity Commission (EEOC) and the Department of Labor (DOL) have their own recordkeeping requirements.
For instance, the DOL mandates that employers keep accurate records of wages, hours, and other conditions of employment under the Fair Labor Standards Act (FLSA).
Our findings show that non-compliance with these federal regulations can lead to audits, back-wage payments, and penalties for employers.
At Check Stub Maker, our paystub maker is designed to help businesses maintain compliance with both state and federal laws, reducing the risk of costly penalties and legal issues.
In this article, we’ve answered the crucial question: “How long does a business have to keep check stubs?”
We’ve explored the varying timeframes mandated by state and federal laws and discussed the importance of proper storage methods, including using specialized software like ours at Check Stub Maker.
Remember, non-compliance can be costly, but it’s easily avoidable with the right tools and practices. We encourage you to explore our pay stub creator to ensure your business stays compliant, organized, and efficient throughout your financial journey.
Try out Check Stub Maker today and experience the ease and reliability of managing your payroll records effectively.
Did our blog meet your needs? You might also find our other guides helpful:
- How Can I View My Pay Stub Before My First Paycheck?
- How Do I Get My Address Changed on My Check Stubs?
- Why Is It Important to Review the Information on a Paycheck Stub?
- Pay Stub Employment Verification
- Employee Medicare on Pay Stub
- Employee Paid Correctly But Pay Stub Shows Incorrect Pay Period
- How Can Employee Correct the Pay Stub If the Employer Ran It Wrong?
- Employer Asking for Pay Stub But I Got Paid in Cash
- What You Can Do If You Work Wont Give You Your Paystubs
- If My Pay Stub Says Vacation Time Do They Have to Give It to Me?
- How to Access Pay Stubs If Your Not a Best Buy Employee Anymore
- Letter From Employer Verifying No Pay Stub for Work Week
- Imputed Income on Paystub
- What Is a Paycheck Stub?
- What Is an Online Pay Stub?