Payroll Recordkeeping & Documentation FAQs

Accurate payroll recordkeeping is one of the foundations of effective payroll administration and compliance. Payroll records document employee compensation, hours worked, deductions, taxes, benefits, payments, and other information needed to support payroll processing and reporting.

The Recordkeeping & Documentation FAQs from Payroll Training Center provide answers to common questions about payroll records, employee documentation, timekeeping records, wage and hour records, payroll tax records, Form W-2 documentation, direct deposit records, garnishments, benefits, record retention, electronic records, payroll audits, and recordkeeping best practices.

FAQs About Payroll Recordkeeping And Documentation

What is payroll recordkeeping?

Payroll recordkeeping is the process of creating, maintaining, protecting, and retaining records related to employee compensation and payroll administration. Payroll records can include:

• Hours worked
• Wages

• Salaries
• Overtime
• Bonuses
• Commissions
• Deductions
• Tax withholding
• Payroll tax deposits
• Payroll registers
• Wage statements
• Direct deposits
• Benefits
• Garnishments
• Leave records

What records should an employer maintain for each employee?

Depending on applicable requirements, records may include:

• Employee name
• Address
• Social Security or tax identification information
• Employment dates
• Job title
• Pay rate
• Pay frequency
• Hours worked
• Overtime
• Deductions
• Tax withholding
• Benefits
• Leave
• Payroll payments
• Required employment documentation

What timekeeping records should employers maintain?

Depending on applicable law, employers may need records showing:

• Hours worked
• Workweek
• Regular hours
• Overtime hours
• Pay rate
• Overtime rate
• Total wages
• Deductions
• Additions to wages
• Payment dates

What payroll tax records should employers maintain?

Records may include:

• Federal tax filings
• State tax filings
• Local tax filings
• Tax deposits
• Payroll registers
• W-2 records
• 1099 records
• Employer identification information
• Tax payment confirmations
• Correspondence with tax authorities

What records should payroll maintain for direct deposit?

Depending on applicable requirements and company policy, records may include:

• Employee authorization
• Bank account information
• Deposit amounts
• Payment dates
• Prenotification information
• Change requests
• Deposit confirmations

What payroll policies should be documented?

Organizations may benefit from documenting policies for:

• Timekeeping
• Payroll processing
• Overtime
• Payroll deductions
• Direct deposit
• Paydays
• Corrections
• Expense reimbursement
• Garnishments
• Payroll record retention
• Employee changes
• Payroll security

Should payroll maintain employee personnel files?

Payroll records and personnel records should be maintained separately depending on the organization's policies and applicable requirements. Payroll should coordinate with HR to ensure that required records are retained appropriately.

How long should payroll records be kept?

Retention periods vary based on the type of record and the law governing the record. Employers should establish a retention schedule that addresses applicable federal, state, and local requirements.