The short answer
There is no single federal payroll records retention requirement. There are at least seven, from different agencies, running on different clocks.
The ones below reach most small employers, checked against agency pages in August 2026. Rules get amended — confirm before you destroy anything.
- IRS — employment tax records: at least 4 years. The clock does not start on the pay date, and the IRS describes its start two different ways. See below. ([IRS employment tax recordkeeping](https://www.irs.gov/businesses/small-businesses-self-employed/employment-tax-recordkeeping))
- DOL / FLSA — payroll records: at least 3 years. Same for collective bargaining agreements and sales and purchase records. ([DOL Fact Sheet #21](https://www.dol.gov/agencies/whd/fact-sheets/21-flsa-recordkeeping))
- **DOL / FLSA — the records wage computations are *based on*: at least 2 years.** Time cards, piece-work tickets, wage rate tables, work and time schedules, and records of additions to or deductions from wages.
- USCIS — Form I-9: 3 years after the date of hire, or 1 year after employment ends, whichever is later. ([USCIS I-9 retention](https://www.uscis.gov/i-9-central/completing-form-i-9/retention-and-storage))
- EEOC — personnel and employment records: 1 year, and for an involuntary termination, 1 year from the termination date. Under the ADEA, payroll records: 3 years. ([EEOC recordkeeping](https://www.eeoc.gov/employers/recordkeeping-requirements))
- DOL — FMLA records: 3 years for covered employers.
- ERISA — benefit plan records supporting a filing: at least 6 years from the filing date.
If you want one number: keep everything payroll-related at least four years, seven if you can afford the storage. Running seven clocks inside a small business is how records get destroyed by accident. Storage is cheap; reconstructing old timecards during a wage claim is not.
The exceptions that bite
Pandemic-era credits run longer. Publication 15 (2026) says to keep records for qualified sick and family leave wages (leave taken after March 31, 2021 and before October 1, 2021) at least 6 years, and records for the COVID-19 employee retention credit on wages paid after June 30, 2021 at least 7 years. That guidance has been revised more than once — check the current Publication 15, not a number in a blog post, including this one.
Underreporting stretches the clock. The IRS general periods of limitations run 3 years, 6 years if you omit income exceeding 25% of the gross income shown on the return, and indefinitely if you never filed or filed a fraudulent return.
State law usually wins. State rules frequently run longer than federal ones, and you have to satisfy both:
- New York: payroll records preserved at least six years (Labor Law § 195(4)).
- California: payroll records showing daily hours and wages at least three years (Labor Code § 1174), with employees entitled to inspect or copy them. Personnel records are separately four years (Government Code § 12946, raised from two by SB 807, effective January 1, 2022).
Check your state labor department; with multi-state employees, apply the longest period across the board.
Which clock starts when
The IRS four-year clock does not start on the pay date. And the IRS anchors it differently in two places:
- Its general recordkeeping page: four years after the tax becomes due or is paid, whichever is later.
- Its employment tax recordkeeping page: four years after you file the fourth quarter return for that year.
Those produce different dates. For a paycheck issued in January 2026, the first lands around April 2030; the second ties the whole year to the Q4 return, due January 31, 2027, and lands in 2031.
Use the later date. A few extra months of storage costs nothing next to having destroyed the record an examiner just asked for.
The I-9 clock is two-part, not flat: three years from date of hire, or one year from separation, whichever falls later. For someone who worked two months, that means keeping it nearly three years past their last day.
When a claim arrives, all clocks stop. On an EEOC charge, DOL investigation, IRS notice, or lawsuit, the routine schedule is irrelevant — preserve everything related to the issue until the matter and any appeals close. Destroying records on schedule after notice of a dispute is its own problem.
What actually counts as a payroll record
The FLSA requires no particular form, only the substance, for every non-exempt employee: name, Social Security number, address, birth date if under 19, sex and occupation, the workweek start, daily and weekly hours, basis of pay, regular hourly rate, straight-time and overtime earnings, all additions and deductions, total wages per period, and the pay date and period covered.
A pay statement is a summary; what proves the number is the hours and rate behind it. Keep the underlying data:
- Pay statements and payroll registers
- Time records — the raw ones, not just approved summaries
- W-4s, W-2s, 1099-NECs, and undeliverable W-2 copies
- Filed 941s/940s and state returns, with confirmation numbers
- Tax deposit dates, amounts, and EFTPS acknowledgment numbers
- Rate change history and any written pay agreements
- Records substantiating any credit you claimed
Format and storage
Every agency above accepts electronic records, provided they are complete, legible, and retrievable on request.
- Back up off the payroll provider. Switch providers, or have one shut down, and access can end fast. Export annually.
- Encrypt. Payroll files are Social Security numbers and bank details in bulk — exactly what gets stolen.
- Write down the schedule and the destruction date. A one-page policy you follow beats an unwritten intent to keep everything forever.
If you prepare pay statements through a document platform such as UWageCo, treat the generated PDFs as one layer of the archive, not the whole thing. It prepares documents from information you supply, and each carries a disclosure saying so. Keep the hours, rates, and deposit records behind them — and filing with any tax authority remains yours to do.
If you are the worker, not the employer
Keep your own pay statements and W-2s. Your employer's copies are theirs, and access can vanish when a job ends or a company closes. Download yours while you still have portal access — you will want them for tax questions, unemployment or disability claims, and any dispute over what you were paid.
Where to look it up
These periods are the federal floor and they change. Verify against the IRS and DOL pages linked above and your state labor department before setting a policy.
This is general information, not legal or tax advice. For your own situation — especially with multi-state employees, benefit plans, or an open dispute — talk to a CPA or an employment attorney.