The Startup Mag Feeds January 16, Like 0. Here are the top 5 reasons why you should start keeping your pay stubs today. Filing Your Taxes You may think a pay stub is only important to keep tabs on your paychecks.
Identity Verification Purposes When you open a bank account, your financial institution will request documents to verify your identity. Keeping Track of the Hours You Work If your employer pays you per hour, every pay stub will detail how many hours you worked in that pay period. Get Ready for Any Tax Audit Maintaining accurate financial records is vital to protect yourself during a tax audit.
Proof of Income Obtaining financing and applying to lease a property are examples of situations when lenders and other parties may request proof of income. Knowing how long to store documents and employee records is very important in the workplace. Good organization is helpful for everyone and is also important when complying with government rules and regulations.
Holding onto documents either too long or not long enough can actually end up costing businesses quite a lot. Here is what you need to know about keeping pay stubs and other important documents. After the six or seven year period is over, it should be safe to utilize a secure shredding solution to ensure confidentiality. Ensure pay stubs are stored in a secure location, as pay records are considered personal information. It is important that employers keep pay stubs and other personal and financial employee information in an organized and secure manner.
Only a select few authorized individuals should be able to access employee records. You may choose to keep pay stubs in both paper form and online, just in case something happens. How can you ensure that both physical and computer copies of pay stubs and other records are secure?
Using a records management servic e can help you stay organized and ensure sensitive information stays private. If you choose to store your records on-site, it is best practice to store in a room or location that has limited access.
You may also want to make sure that the storage location is fire-secure as well as protected from unwanted visitors. Best credit cards Best rewards credit cards. Best cash back credit cards. Best airline credit cards. Best small business credit cards. Best balance transfer cards. Best student credit cards. Best starter credit cards. The best online brokerages for beginners. The best investment apps. The best stock trading apps. Best robo advisors. Average stock market return. Car insurance.
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In the instance of how long to keep pay stubs, the Equal Employment Opportunity Commission EEOC notes that many companies are required to keep employee records. In the event that your company is facing a regulatory investigation, or if it is facing a complaint from an employee, you will want clear, easily accessible payroll records. In addition, well-organized payroll records can also make it easy to complete certain basic business tasks. When tax season rolls around, it will be far easier for your company to get everything done if all financial statements and records are organized and on file.
This is especially important for small businesses, as these companies may not have the resources available to hire a person to do payroll on a full-time basis. Individual workers should also retain their pay stubs. For employees, check stubs are important for a few different reasons. An extremely common reason to keep old pay stubs? Income verification. While a few statements will work, a pay stub is the most common source of income verification.
If you are applying for a loan or line of credit with a bank, or you have been asked to produce your pay stub to verify your salary during an employment negotiation, you will want quick access to your pay statements. Further, pay stubs help you track your taxes and deductions. You should know exactly where all of your money is going at all times.
How long you should keep your pay stubs or not differs according to whether you are an employer or employee. Here is how long to keep pay stubs in each instance.
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