How long should payroll records be kept?

Payroll Record Retention Requirements in New Jersey

Maintaining accurate payroll records is essential for compliance with state and federal regulations. In New Jersey, businesses must keep payroll records for a specific duration to meet operational and audit needs.

How Long to Keep Payroll Records

• Minimum Retention Period: As of 2026, New Jersey requires employers to retain payroll records for at least 6 years.
• Types of Records to Retain: This includes employee time sheets, wage rate tables, payroll registers, tax withholding documents, and records of hours worked.
• Federal Considerations: The Fair Labor Standards Act (FLSA) generally requires keeping payroll records for at least 3 years, but New Jersey’s 6-year requirement is more stringent and should be followed.

Operational Best Practices

• Organize Records Systematically: Use digital payroll systems or secure physical filing to ensure easy retrieval during audits or employee inquiries.
• Include Tax Documentation: Retain copies of New Jersey payroll tax filings and payment confirmations alongside payroll records for comprehensive recordkeeping.
• Plan for Employee Separation: Keep records for former employees for the full retention period to address any wage disputes or unemployment claims.
• Automate Retention: Implement payroll software that automatically archives records for the required duration to reduce manual errors and compliance risks.

Related Compliance Considerations

• Payroll Taxes: Accurate records support timely and correct New Jersey payroll tax payments and reporting.
• Employee Classification: Proper documentation helps verify employee status for tax and benefit purposes.
• Audits and Reporting: Maintaining records for 6 years ensures readiness for state or federal audits.