What is Payroll Retention?
As a St. Augustine business owner, it can feel overwhelming to keep track of all of your paperwork and records. However, this is a critical task that many owners might seem to overlook. Unfortunately, misplacing necessary documentation can create an even bigger headache than filing it in the correct place, to begin with. When it comes to payroll, there are no exceptions. By having all of your employee documentation in one spot, you’ll make the task of payroll more accessible and more efficient. Do not fear the dreaded words of payroll retention; instead, join us as we discuss how easy and essential this task is.
Payroll Records
Every business owner will have to keep records of different types of documentation for their business and even personal matters. Misplacing paperwork can be infuriating and make the process of payroll even harder. Here is a shortlist of a few types of payroll documentation you should have within your files, such as:
- employee personal information
- employee hourly pay
- overtime pay
- wages per period
- payment dates or periods
- workweek information
- forms (W-2, W-3, W-4, W-5)
- benefit records
If your business requires other types of documentation or forms for payroll, make sure to keep them with these general documents as well.
Payroll Retention
There are many benefits that you will reap by keeping payroll records. The first is that you’ll be following the laws of a few different agencies, which require a business to retain their payroll for a certain number of years. You’ll also be able to access information faster and easier than before, making payroll less time-consuming since all your documentation is organized. Finally, it can also benefit you if you get audited by the IRS or accused of a crime by a current or former employee.
Storing Payroll Records
The best way to store payroll records is whichever way works best for you and your business. Some business owners prefer the traditional way of record-keeping involving paper documentation. However, new technology makes it easier than ever to place these records in online files. If you are going with paper records, make sure to always label and store documents in a locked, water, and fireproof box or cabinet. With the online filing, you don’t have to worry about the records becoming damaged. However, it’s important to note that you need to be uploading your files in a safe and secure place on your computer or payroll system. This will prevent hackers from stealing personal information from you and your employees.
Retention Requirements
Did you know that there are laws in place to inform business owners such as yourself just how long you should keep your payroll records for? According to the Fair Labor Standards Act, also known as FLSA, you must retain all your payroll records for at least three years. Records of employment must be kept for four years, and records for determining wages must be kept for two years. The following agencies require that you keep records on file, such as:
- IRS
- Fair Labor Standards Act
- Equal Employment Opportunity Commission
Payroll retention is not as complicated as it may seem, and, in the end, it can save you time, money, and added stress. If you are looking for a reputable payroll service company, our team at Vision HR is here to help. We make payroll easy for business owners so you can get back to what matters most. Contact us today to learn more about our services.
