How Long to Keep Pay Stubs and Payroll Records: IRS, FLSA, and Legal Rules Business Owners Should Know

Keep payroll records and pay stubs organized to meet IRS, FLSA, and legal requirements for audits, claims, or disputes. Storing records digitally reduces space use and keeps documents available beyond the required minimum retention periods.

By Douglas Wade, Attorney

Email | Call (800) 484-4610

Have a quick question? We answered nearly 2000 FAQs.

Table of Contents

1. Introduction

2. How long must you keep payroll records on file according to IRS regulations?

3. How long do payroll records have to be kept as per the FLSA?

4. How long are the records utilized to calculate salary kept on file?

5. Do records of payroll need to be kept on file using a retention system?

6. Why should payroll records be kept on file?

7. Should payroll records be retained for longer than necessary?

Introduction

You are among the 6 million employers that support the economy as an owner of a small company. Keeping your payroll records is one of the many duties that come with having a lot of power. Several federal requirements require you to have payroll information on file, regardless of whether you are a family-owned company commemorating 125 years in operation or a bootstrapped company. So, are there guidelines for “How long to keep pay stubs and payroll records?”

Although businesses must keep some payroll data for a minimum of four years, several experts advise keeping your files for even longer. The regulations are imposed by various federal authorities, and although you are under no obligation to keep your pay stubs & tax returns for an extended period of time, there may be certain justifications for keeping your records beyond the legally required minimums. Any doubts you may have regarding your responsibilities should be discussed with an employment or tax law specialist.

“How long to keep pay stubs?” Understanding the correct duration is key to staying compliant & audit-ready.

How long must you keep payroll records on file according to IRS regulations?

The IRS mandates that you maintain employment tax records for a minimum of four years following your most recent tax return, whether it was a quarterly or annual filing. If the IRS decides to check your records, you must have them on hand. The following is what you must document:

Your EIN, or employer identification number
Dates and totals of all pension, annuity, and wage payments
The amount of tips that the workers who get them report to you
The in-kind wages’ fair market value
Your employees’ names, SSNs, physical addresses, and jobs
Copies of W-2 Form from employees, if they were returned to you by mail as undelivered
Employment dates
Pay periods for employees who missed work due to illness or injury, as well as the weekly rates and amount you or other parties paid them
Your tax deposit dates and amounts
Copies of the files that were returned
Documentation of tips given
Documentation of fringe benefits rendered, with supporting documentation
Copies of tax returns and deposits in duplicate
Form W-2 documents that were returned
Canceled or rejected checks or electronic payments that have been reversed
Copies of W-4 form (using the data on Form W-4) for a minimum of four years following the date of the most recent return
Commitments to withhold additional money

For what duration should employers retain Form W-2?

The IRS advises businesses to maintain records of worker copies of W-2 form (and form W-2c) that were sent to you as not delivered for four years following your most recent completed tax return, whether it was a quarterly or yearly filing, in order to stay in compliance.

How long do payroll records have to be kept as per the FLSA?

Payroll records for each non-exempt employee must be kept for a minimum of 3 years, according to the Fair Labor & Standards Act (FLSA). Although there are no explicit guidelines on the FLSA’s website regarding file organization, it does stipulate that “records must be preserved at the location of work or a central documents office.” The list of records to preserve, which includes employment records, is as follows:

Full name & social security number of the employee
Physical address with zip code included
Date of birth, in the event that the person is under 19
Work and sex
When the worker’s workweek starts, both the day and the hour
The employee’s daily working hours
Weekly total of hours worked
The basis for paying an employee’s salary (provide some examples): Weekly pay rate: $440 for the week or piecework, or $11 an hour.
Typical hourly wage
Total straight-time profits per day or week
Total earnings for overtime during the workweek
Any increases or decreases to the worker’s pay
Total compensation received for each pay period
The payment’s date and the period it covers

In this section, we clarified “How long to keep pay stubs as per the FLSA?” and other details.

An additional record

For three years following the date of employment or one year following the date of termination, whichever comes first, you must also maintain an executed I-9 form for each worker on your payroll, according to the US Citizenship and Immigration Services.

How long are the records utilized to calculate salary kept on file?

In addition, you must retain the records used to calculate wages for two years under the FLSA. Therefore, any and all of the documents you utilize to determine your employees’ compensation. The following examples are provided by the FLSA to help you understand what these records ought to contain:

Tables of wage rates
Timesheets and tickets for individual tasks
Schedules for work and time
Records of both deductions and additions to wages

“All documents (such as pay rates, seniority & merit systems job evaluations, and agreements of collective bargaining) that provide an explanation for paying workers of different sexes in the same organization differently must be retained by employers for a minimum of two years”, explains the next rule on wage-related records from the US Equal Employment Opportunity Commission.

You can avoid searching for documents by keeping them in one location. It’s important since the IRS doesn’t always give ample time to get ready for an audit. You might only have a few days or weeks. Therefore, a small amount of order can reduce the amount of tension that is added to a difficult circumstance.

Do records of payroll need to be kept on file using a retention system?

Many organizations are accepting electronic record-keeping, and you are free to select the retention method that best suits your needs. Additionally, several industry professionals—such as Rachel Grantham, a financial and payroll specialist with more than 20 years of experience—agree that it can be a wise decision. According to Rachel, there are benefits to keeping records digitally:

You can quickly and easily arrange each distinct salary period with all pertinent documents for auditing reasons by using electronic record storage.
By going paperless, you can avoid misplacing any tangible files, folders, or paperwork. Document saving is made simple and convenient by using a consistent naming scheme for records.
By avoiding needless document storage expenses, opting for electronic storage over physical filing can help improve your bottom line.

It may be as easy as scanning and storing all the payroll records digitally if you previously stored hard copies and wish to switch to digital. Alternately, you can move to a cloud-based system and save your paper documents for the duration of four years (as previously mentioned). Following the expiration of the retention obligations, you will be able to rely on your digital records.

It doesn’t have to be complicated, whether you’re just starting your business or reevaluating how you want to set up your records. We spoke with Kelly Finn, a certified payroll professional with more than a decade of expertise in the field, for some advice. According to Kelly, the following concepts might be worthwhile to take into account:

Establishing distinct employee folders and keeping them alphabetically arranged by last name can be beneficial. For instance, place these documents in every worker’s folder rather than in another folder that contains all performance reports or a folder dedicated to 401(k) paperwork.
The system functions whether files are stored on an encrypted server or are organized electronically. Or, if you would rather, store each employee’s hard copy documents and folders in a file cabinet or another filing container.
I-9 paperwork needs to be submitted individually. I-9 is a document signed to confirm the eligibility of a person to work in the United States; therefore, only authorized parties must access an I-9. It would be a smart move to store each of the employees’ I-9 documents in a separate folder.
Your staff may also benefit from having all of their files in one convenient place. They can consult any policy papers, new hire packages, or other evidence proving the date of insurance activation if necessary.

Why should payroll records be kept on file?

Payroll records must be kept on file and readily available due to federal, state, and municipal regulations, which may sound like an endless loop. So what you need to do is to learn how to retain them so that you can remain legal and compliant. In addition, you never know when you are going to need them.

What would occur, for instance, if the IRS conducted an audit of you? Or perhaps a former worker chooses to file a lawsuit against you? Getting organized will help you feel more at ease and prevent any unpleasant shocks in the unlikely scenario that you need these records to defend yourself.

Should payroll records be retained for longer than necessary?

Alright, a lot of information has been covered around “How long to keep pay stubs?” The primary conclusion is that every company should most likely have a strategy in place to have those tedious payroll documents on file and within easy reach. The U.S. Chamber of Commerce advises holding onto them for a maximum of six to seven years if you’d like to be cautious.

Ultimately, the IRS even says that since you might require the data in the future, it may be wise to keep it. They list creditors and insurance firms, for instance, as organizations that might demand that you hold onto them longer than the IRS.

Therefore, keeping these records for the duration of your business may simply be a good idea. Additionally, you won’t be concerned about the space limitations often connected with hard copies & document storage because the majority of payroll software vendors offer limitless digital record storage. Just remember that, in the end, it is your duty as an employer to provide these documents upon request.

If you’re still unsure about “How long to keep pay stubs?” the safest answer is: as long as reasonably possible within your storage capacity.

The number of payroll records you have can be many, but after you manage to establish a plan, all things can be organized.

Have a quick question? We answered nearly 2000 FAQs.

See all blogs: Business | Corporate | Employment

Most recent blogs:

How Long to Keep Pay Stubs and Payroll Records: IRS, FLSA, and Legal Rules Business Owners Should Know

California Mileage Rate 2025: IRS Figure, Reimbursement Policy, and Employer Instructions

California’s mileage reimbursement rate in 2025 is 70 cents per business mile, covering fuel, maintenance, insurance, and depreciation. Employers must ensure reimbursement complies with Labor Code Section 2802 and requires accurate mileage records from employees.

California Labor Code Section 2802: Employer Reimbursement Rules for Work Expenses

California employers must reimburse workers for necessary expenses like phones, internet, mileage, and home office equipment. Employees can recover unpaid reimbursements through Labor Commissioner claims or class action lawsuits against violating employers.

Double Time California: When Employers Are Required to Pay Twice the Regular Hourly Rate and How It Is Calculated

California employers must pay double-time wages in situations like 12-hour shifts or working seven days without a break. This article covers who qualifies, common payroll mistakes, and how double-time compensation should be figured under California law.

Tip Pooling Rules in Every State: What Restaurant Owners Must Know

Tip pooling laws vary by state, affecting how restaurants manage tips and comply with federal and local wage rules. Restaurant owners are required to follow guidelines to avoid fines, lawsuits, and disputes over tip distribution and service charges.

How Long Does an Employer Have to Pay You After Payday in California: Legal Timeframes, Rules, and Consequences

Employers in California must pay wages on time or face fines, including back pay and waiting time penalties for delayed checks. Employees may pursue compensation for late or missing pay through legal claims tied to payroll violations under state labor law.

CA Exempt Employee Classification: Definitions, Exemptions, and Legal Exposure for Employers

Employers risk lawsuits and large settlements when CA workers are misclassified under state exemption rules. Roles must be reviewed regularly to match duties.

How to Get a Job at 14: Simple Steps for Teens Who Want to Start Working

Many teens can get jobs at 14 with the right documents, clear goals, and a simple but effective resume. This article explains rules, permits, applications, interviews, and ways to stay focused during your first job search.

How Many Hours Can a 17-Year-Old Work in California During School? Labor Rules You Should Know

California limits how many hours 17-year-olds can work during school to protect their safety, education, and wages. Know the labor rules that apply to minors and what families should do if employers violate state employment laws.

AB 1228 Summary: California Fast Food Law on Wages, Council Authority, and Business Impact

California's AB 1228 law sets a $20 hourly wage for fast food workers and forms a state-level Fast Food Council. It changes employment rules, impacts exempt pay requirements, and raises business cost issues for restaurants and their customers.

Can a 13 Year Old Work? 14 Real Ways for Young Teens to Earn Money Safely

A 13-year-old can safely earn money through creative, age-appropriate jobs like babysitting, pet care, or blogging. This guide lists 14 proven options that balance responsibility, fun, and parental supervision.

Severance Pay California: What It Includes and How to Change the Terms

California severance pay is not legally required, but agreements often include pay, benefits, and legal waivers. Employees can negotiate terms, challenge clauses, and improve severance offers with legal or personal review.

Employment Litigation: Key Issues in Job Termination, Discrimination, and Harassment Cases

Employees may sue for job termination, discrimination, or harassment when workplace actions violate federal or state employment rules. This article explains legal protections, common violations, and employee rights involved in workplace-related lawsuits.

Company Morale: 20 Practical Ways to Improve Workplace Culture and Engagement

Improve company morale with 20 practical tactics that strengthen workplace culture, boost motivation, and support everyday team interaction. Encourage positivity, increase retention, and support employee satisfaction through real-world practices designed for today's professional environment.

California Mileage Reimbursement 2025: Rate Details, Methods, and Employer Duties

California employers must reimburse staff for business-related vehicle use based on mileage rates or alternative approved methods. The 2025 policy outlines IRS rates, covered expenses, and mandatory employer responsibilities under California labor law.

Temporary Disability California: Workers’ Compensation Coverage, Benefit Limits, and Qualifying Conditions

Temporary disability in California pays part of your wages after a workplace injury confirmed by an approved medical provider. Eligibility, time limits, and payment amounts depend on work status, legal codes, employer options, and medical updates.

Legal Age to Work in 2025: Employment Limits for Minors

State and federal laws set age, hour, and job restrictions for minors working in 2025 to protect their safety. Review employment limits for children across all fifty states, including agricultural rules, certificates, and non-hazardous job requirements.

Abusive Conduct Under California Law: Definition, Workplace Examples, and Employer Obligations

Abusive conduct in California workplaces includes bullying, hostile language, and exclusion that disrupts an employee's job performance. Employers must provide harassment prevention training and meet legal obligations under FEHA and Senate Bill No. 778.

Minimum Wage in San Diego 2025: Updated City and County Pay Rates for Employers

Minimum wage in San Diego City is $17.25 per hour in 2025, while the county rate remains $16.50. Employers must comply with state, city, and county wage laws or face penalties for underpayment and related violations.

California Labor Law: 2025 Employer & Employee Guide to Wages, Breaks, Leave, and Rights

California’s 2025 labor laws address wages, breaks, overtime, workplace safety, discrimination, sick leave, and employee protections. This guide outlines rules on scheduling, payroll, final paychecks, paid sick time, and employment standards for minors.

California Final Paycheck Law: Payment Timelines, Legal Rules, and Employer Responsibilities

California employers must follow exact final paycheck rules when employees quit or are fired, or risk paying penalty wages. The article covers payment timing, employer duties, and industry-specific exceptions including film, oil drilling, and agriculture.

Can You Work at 14 in California? Laws, Restrictions, and Permits for 14- and 15-Year-Olds

Minors aged 14 can work in California, but strict federal and state labor laws limit hours, industries, and duties. Work permits are mandatory for 14- and 15-year-olds, and employment is subject to revocation if conditions are violated.

How Many Hours Is a 9-5 Job? Daily, Weekly, Monthly, and Yearly Breakdown

A 9–5 job typically means eight hours daily, totaling 40 hours weekly across five standard workdays. Monthly and yearly hours vary depending on vacations, with most averaging 160 monthly and 2,000 annually.

Exempt Employee California: 2025 Rules, Salary Thresholds & Classification Tests Explained

California's 2025 exempt employee rules include new salary thresholds for fast food and healthcare workers under state wage laws. Detailed tests determine exemption status based on duties, salary structure, and consistent application of independent judgment.

Fair Chance Employers: A 2025 Guide to Compliant and Inclusive Hiring Practices

Fair chance hiring promotes compliance with evolving state and federal laws that support inclusive recruitment for applicants with records. Employers must assess convictions individually, follow proper procedures, and align background checks with job relevance and legal standards.

PAGA Claims in California: How Workers Can File and What Penalties Employers Face

Employees in California can file PAGA claims for labor violations and recover civil penalties on behalf of the state. Penalties vary by infraction, and employers may reduce liability if violations are corrected within the allowed timeframe.

How Many Hours Can a 16 Year Old Work? A Complete Guide to U.S. Child Labor Laws

Federal law sets no limit on work hours for 16-year-olds, but many states impose restrictions and nighttime limits. This guide breaks down FLSA rules, state variations, job types, and penalties for violating child labor laws.

New Hire Forms Checklist: Required Documents & Onboarding Essentials for Employers

Manage new hire onboarding smoothly using this checklist of required federal, state, and internal employment documents. Meet compliance needs and simplify hiring by collecting tax forms, offer letters, benefits paperwork, and signed policy acknowledgments.

Comp Day Explained: Eligibility, Benefits, and How to Calculate It Correctly

Comp day lets eligible employees take time off instead of receiving overtime pay, offering flexibility in work schedules. This article explains how comp time is calculated, who qualifies, and the differences between comp time and overtime rules.

Work Permit California: Requirements, Age Limits, and Job Restrictions for Minors

Minors in California need a work permit to get jobs, with specific restrictions based on age, role, and school status. This article outlines age requirements, job limitations, working hours, and exceptions to the state’s work permit rules for minors.

See all blogs: Business | Corporate | Employment

How Long to Keep Pay Stubs and Payroll Records: IRS, FLSA, and Legal Rules Business Owners Should Know

Introduction

How long must you keep payroll records on file according to IRS regulations?

How long do payroll records have to be kept as per the FLSA?

How long are the records utilized to calculate salary kept on file?

Do records of payroll need to be kept on file using a retention system?

Why should payroll records be kept on file?

Should payroll records be retained for longer than necessary?

Free Consultation