Keeping Payroll Records
In the UK all businesses are required to retain a variety of records for a specific period of time. Keeping payroll records and associated information forms part of this statutory requirement, even once an employee has left.
As an employer it is your duty to keep records showing that you’ve accurately recorded sickness absence, hours worked, and pay. There are statutory requirements for specific record types, and specifically what you pay your employees and the deductions you make including:
reports you make to HM Revenue and Customs (HMRC)
payments you make to HMRC
employee leave and sickness absences
tax code notices
taxable expenses or benefits
Payroll Giving Scheme documents, including the agency contract and employee authorisation forms
HMRC may check your records to ensure you are paying the correct tax so they must be up to date and accurate. Records can be kept in paper or electronic form - but how long should you keep payroll records? Below we outline the payroll records retention requirements.
Payroll Record Rention Requirements |
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Statutory Rentention Periods
| Record Type | Retention Requirement |
| Coronavirus Job Retention Scheme | 6 years for furlough records. Although the statutory requirement is for employers to retain the written furlough agreement for 5 years, HMRC can retrospectively audit all claims - so 6 years is recommended. |
| Income Tax & NI Returns | 3 years after the end of the financial year to which they relate. |
| National Minimum Wage records | 3 years after the end of the pay reference period following the one that the records cover. |
| Payroll Wage/Salary Records (including overtime, bonuses, expenses) | 3 years plus current year. Due to business expenses claims on payroll records which are also classified as ‘accounting’ records, employers often keep these records for at least 6 years - the statutory minimum for accounting records. |
| Retirement Benefits Schemes (records of notifiable events, e.g.incapacity) | 6 years from the end of the scheme year in which the event took place. |
| Statutory Maternity Pay (SMP) Records, calculations, certificates (Mat B1s) or other medical evidence including parental, paternity and adoption pay records. | 3 years after the end of the tax year in which the maternity period ends. |
| Working Time Records (Including overtime, annual holiday, jury service, time off for dependents, etc) | 2 years from date on which they were made. |
Non Statutory Retention Periods
| Record Type | Recommended Retention Period |
| Parental Leave | 18 years from the birth of the child. |
| Pension Records | 12 years after the benefit ceases. |
| Pension Scheme Investment Policies | 12 years from the ending of any benefit payable under the policy. |
| Redundancy Details | 6 years from the date of redundancy. |
| Time Cards | 2 years after audit. |
| Statutory Sick Pay (SSP) records | 3-6 years. In the instance of claims it's advisable to keep records for longer period: e.g disability discrimination claim: 6 months, personal injury claim: 3 years, contractual claim for breach of an employment contract: 6 years. COVID-19 SSP can be claimed back from HMRC for 3 years after the end of the tax year. |