May 28, 2020  
 
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HR Compliance

 

Employee Payroll Record

As an employer, you are required by federal law to retain certain payroll and wage records. A good employee payroll record will help you get organized â€" and keep your business on the good side of the law.

Who knew business ownership would involve this much recordkeeping?

If you're on the ball, everything from your initial setup documents to daily invoices will be archived in an orderly filing system. Some recordkeeping functions are even required by federal and state – including the archiving of each worker's employee payroll record.

Payroll records serve a variety of purposes for both your employees and your organization. Since they have tax consequences, they need to be retained in the event a payroll-related dispute arises at a later date. If you use a payroll services provider, most of your recordkeeping requirements will be handled for you. If not, you'll need to design your own system for payroll record maintenance.

An employee payroll record form helps streamline the recordkeeping process. Rather than relying on random recordkeeping systems, the employee payroll record centralizes each worker's payroll data on a single form, giving you quick access to each worker's individual payroll history.

Recordkeeping Requirements

Employee recordkeeping requirements are extensive, if not onerous. There are two federal agencies you need to worry about: (1) the IRS and (2) the Department of Labor. Their recordkeeping requirements are similar and include a vast assortment of information including wages paid, withholdings, taxes paid, total compensation and much more. The IRS requires employers to maintain records for four years after the tax due date or actual paid date; the DOL requires record maintenance for three years after the date of the last entry.

Employee Payroll Record Forms

Whether you use a software application or a paper system, your employee record forms need to document several payroll-related items. Data fields for employee payroll record forms typically include things like payroll date, wages paid, overtime hours, gross compensation, federal/state/FICA withholdings and other payroll deductions.

How you apply these forms in your workplace is largely up to you. The important thing is to make sure that HR personnel consistently update employee payroll records and that the information contained on the forms matches the information on each worker's pay stub.

As a rule, each form should have enough space to record a year's worth of payroll periods. At the end of the year, the form is archived to meet recordkeeping requirements and for future reference.

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