Payroll Recordkeeping Requirements: How Long to Keep What

Payroll records are not just paperwork — they are your first line of defense in a wage dispute, IRS audit, or Department of Labor investigation. Federal agencies, Florida state agencies, and various labor laws each impose their own recordkeeping requirements, and the retention periods do not always match. For Florida employers, the safest approach is to understand the longest applicable retention period for each type of record and build your system around that. This guide breaks down every major requirement so you know exactly what to keep and for how long.

Why Recordkeeping Matters

Proper recordkeeping protects your business in multiple ways:

• Wage and hour claims: In Florida, employees can file wage claims going back 3 years (or 4 years for claims under the Unfair Competition Law). Without records, the burden of proof shifts entirely to the employer — and courts will often accept the employee's estimates.
• IRS audits: The IRS generally has 3 years from the filing date to audit a return, but this extends to 6 years if income is substantially understated, and there is no limit for fraud.
• EDD audits: Florida's Employment Development Department can audit payroll tax records going back 3 years from the date a return was filed or due, whichever is later.
• Litigation defense: If a former employee sues for overtime, misclassification, or discrimination, your payroll records are critical evidence.

FLSA Requirements (Federal)

The Fair Labor Standards Act (FLSA), enforced by the U.S. Department of Labor, establishes two tiers of record retention:

3-Year Retention (Payroll Records)

Employers must keep the following records for at least 3 years:

• Employee's full name, Social Security number, and address
• Birth date (if under 19)
• Gender and occupation
• Pay rate and basis (hourly, salary, piece rate, etc.)
• Hours worked each day and each workweek
• Total daily or weekly straight-time earnings
• Total overtime pay for each workweek
• Total wages paid each pay period
• Deductions from and additions to wages
• Date of payment and pay period covered

2-Year Retention (Supplemental Records)

The following supplemental records must be kept for at least 2 years:

• Time cards, time sheets, and work schedules
• Wage rate tables and piece rate schedules
• Records of additions to or deductions from wages
• Order, shipping, and billing records (used to compute piece-rate wages)

IRS Requirements

The IRS requires employers to keep employment tax records for at least 4 years after the date the tax was due or paid, whichever is later. This applies to:

• Form 941 (Quarterly Federal Tax Return) and all supporting records
• Form 940 (Annual FUTA Tax Return)
• W-2 copies — the employer's copy of every W-2 issued
• W-4 forms — keep for 4 years after the last tax year the W-4 was in effect
• Form 1099-NEC copies for independent contractors
• Records showing amounts and dates of all tax deposits
• Records of allocated tips
• Records of fringe benefits provided
• Records of adjustments or claims for refund

Florida-Specific Requirements

Florida Labor Code and the Florida Code of Regulations impose some of the most stringent recordkeeping requirements in the country. Here are the key rules:

4 Years — Most Payroll Records

Under Florida law, employers must retain the following for at least 4 years:

• Employee names, addresses, and Social Security numbers
• Job classifications and job descriptions
• Pay rates (including overtime rates)
• Hours worked each day and each workweek (including start and end times, and meal period records)
• Gross wages earned each pay period
• All deductions from wages
• Net wages paid and dates of payment
• Pay stubs (itemized wage statements)
• Time records, including clock-in/clock-out times

Meal and Rest Period Records

Florida employers must keep records showing that employees received their required meal periods and rest breaks. While there is no specific statute defining a separate retention period for these records, they fall under the general 4-year payroll recordkeeping requirement. Given that meal period penalty claims can be brought up to 3 years back (or 4 years under UCL), keeping these records for 4 years is strongly recommended.

Personnel Files

Florida does not have a single statute specifying exactly how long to keep personnel files after termination, but the statutes of limitations on various employment claims (discrimination, wrongful termination, etc.) can extend to 4 years or more. Many employment attorneys recommend retaining personnel files for at least 5 to 7 years after an employee's termination.

I-9 Retention Rules

Form I-9 (Employment Eligibility Verification) has its own unique retention formula, separate from all other payroll records:

I-9 forms must be available for inspection by the Department of Homeland Security (DHS), Department of Labor (DOL), or Department of Justice (DOJ) with three business days' notice. Store I-9s separately from personnel files so you can produce them quickly without exposing other employee records.

Master Retention Table

Here is a consolidated reference table showing the minimum retention period by record type and governing authority. When multiple rules apply, follow the longest period:

* W-4: 4 years after the last year the form was in effect.

What Records You Must Keep

Beyond the categories above, here is a comprehensive list of records Florida employers should maintain:

• Employee pay stubs / itemized wage statements (Florida requires very specific information on pay stubs under Labor Code § 226)
• Records of meal period and rest break compliance
• Overtime calculations and records
• Records of wage garnishments and court orders
• Workers' compensation insurance records
• Employment contracts and offer letters
• Performance reviews and disciplinary notices
• Separation documents (resignation letters, termination notices)
• Leave of absence records (CFRA, FMLA, PDL)
• Expense reimbursement records

Digital vs. Paper Storage

Both federal and Florida law allow employers to store records electronically, provided the records are:

• Legible and accessible — inspectors must be able to view and print records on request
• Unalterable — records must be stored in a format that prevents tampering (PDF is generally preferred over editable formats)
• Backed up — while not explicitly required by statute, losing records due to a system failure does not excuse non-compliance

Cloud-based payroll systems like Gusto, ADP, and Paychex automatically store most payroll records digitally and retain them for the legally required period. If you use such a system, verify your provider's data retention policy and ensure it meets Florida's 4-year minimum.

Best Practices for Small Businesses

1. Default to the longest retention period. When in doubt, keep records for at least 4 years. For personnel files and anything related to potential litigation, 7 years is safer.
2. Separate I-9 forms from personnel files. This allows you to produce I-9s for immigration audits without exposing other employee information.
3. Maintain a retention schedule. Create a simple document listing every record type, its retention period, and the review/destruction date. Review this schedule annually.
4. Destroy records securely. When retention periods expire, shred paper records and permanently delete digital files. Employee records contain sensitive personal information (SSNs, addresses, bank account numbers).
5. Do not destroy records during active disputes. If you are aware of any pending or threatened claim, audit, or investigation involving an employee, preserve all related records regardless of retention period expiration — destroying them could constitute spoliation of evidence.
6. Use payroll software with built-in retention. Automating recordkeeping through a platform that archives records by default is the simplest way to stay compliant.