How long should payroll records be kept?

Payroll Record Retention Requirements in New York

Maintaining accurate payroll records is essential for compliance with New York state regulations and federal requirements. Proper recordkeeping supports tax reporting, audits, and employee verification processes.

Recommended Retention Period for Payroll Records

• Minimum Retention Time: As of 2026, keep all payroll records for at least 6 years. This aligns with New York State Department of Labor guidelines and IRS requirements.
• Types of Records to Retain: Include employee time sheets, wage rate information, payroll tax filings, wage statements, and records of deductions.
• Electronic Records: Electronic payroll records are acceptable if they are accurate, accessible, and can be reproduced in a readable format.

Operational Considerations

• Compliance: Retention supports compliance with New York labor laws and federal payroll tax obligations.
• Audit Preparedness: Keeping records for 6 years ensures readiness for state or IRS audits.
• Automation: Use payroll software with automated record retention and backup to streamline compliance.
• Employee Classification: Maintain clear records distinguishing between employees and independent contractors to support correct tax treatment.
• Confidentiality: Secure payroll data to protect sensitive employee information.