Introduction
Knowing how long to keep pay stubs helps with tax filings, audits, and income verification—but holding onto them indefinitely isn’t necessary. This guide explains the recommended retention periods for both employers and employees, when it’s safe to discard pay stubs, and how to do so securely without compromising sensitive information.
Federal Recordkeeping Requirements for Employers
By federal law, employers must keep payroll records—including pay stubs and related wage information—for at least three years to comply with labor regulations. Tax-related documents and employment tax records should be retained for a minimum of four years. These timeframes serve as a baseline to ensure compliance and readiness in case of audits or disputes.
IRS Rules for Employees and Business Owners
The IRS generally recommends keeping pay stubs and tax-related paperwork for at least three years from the date you file your return or until taxes are paid—but it can go up to four or even six years depending on your tax situation. Longer retention may be wise if you expect an audit, owed refund, or corrected return.
Why Employees Might Keep Pay Stubs Longer
Employees often retain pay stubs until their annual W-2 form arrives and numbers align. Beyond that, having up to three years of pay history can support applications for loans, housing, or financial verification, serving as proof of consistent income when needed.
State-Level Variations — When to Check Local Laws
Some states require longer retention periods for payroll records—ranging from four to six years—based on labor laws or wage claim statutes. Employers and employees should check state-specific rules to ensure their retention practices meet local legal standards and reduce risk.
Safely Discarding Old Pay Stubs
When it's time to discard old pay stubs, do it securely:
- Physical documents: Shred using a cross-cut shredder or hire professional services to prevent identity theft.
- Digital files: Permanently delete files from storage and back-ups to avoid unauthorized recovery.
- Act consistently: Set a regular schedule—such as annually—to review and purge records once it's safe to do so.
Best Practices for Employers and Employees
- Keep pay stubs at least three years for compliance—and longer for audit protection.
- Store tax records safely up to six years in line with IRS and business needs.
- Use organized digital or physical filing systems to reduce clutter and boost access.
- Always dispose of sensitive documents securely, whether paper or digital.
Conclusion
Knowing how long to keep pay stubs helps avoid clutter, reduce risk, and ensure compliance. Keeping them for three to six years meets most legal and personal needs, while properly disposing of outdated records protects privacy. A thoughtful retention strategy is a small effort that pays off in efficiency and security.
Ensure your payroll documentation stays accurate and safe: Generate compliant pay stubs easily or explore formatting examples in our Regular Pay Stub guide.
