Basic payroll record retention for tax purposes requires employers to keep wage information and tax data for employees for at least four years, reports the IRS. The Fair Labor Standards Act requires employers to keep payroll records of employees for at least three years, states the U.S. Department of Labor.Continue Reading
Employment tax records available for IRS review should include personal information such as the names, Social Security numbers, addresses and specific occupations of all employees, according to the IRS. The records should detail periods of employment and amounts of wages, tips, and annuity, pension and in-kind payments. Needed tax information includes copies of filed tax returns and income tax withholding allowance certificates of employees as well as records of tax deposits.
Required employee identification information for payroll includes name, Social Security number, address, birthdate and sex, reports the U.S. Department of Labor. General work details should list occupation, daily and weekly work hours, how wages are calculated, and hourly wage rates. Employers should specify regular daily and weekly earnings, overtime earnings, additions or deductions from wages, and total wages paid each period. Employers should retain documents they base records on such as time cards, time schedules and wage rate schedules for at least two years. Timekeeping methods such as time clocks, individual worker records or timekeeping managers are at the discretion of the employer.Learn more about Accounting