Here's Why You Should Keep Your Paystubs
If you are making pay stubs for your employees or receiving pay stubs from your employer, you may be wondering if you need to keep them and, if so, for how long? Pay stubs serve many purposes and can come in handy for future reference. Here’s what you need to know about keeping your stubs once you’ve made them or received them.
Why You Should Keep Your Pay Stubs
As an employee, you may require proof of income for various reasons including applying for a loan, submitting a rental application, or virtually anything that requires you to prove your income. For both employees and employers, pay stubs function as records of how much someone has been paid and what deductions have been made. It is advisable to hold onto pay stubs for record-keeping on both ends as well as proof of income if the need arises.
While pay stubs aren’t required during tax time, they function as supporting documents in the case of a review or audit. In short, it’s wise to keep your pay stubs. While the need to present them may not arise, it is far more convenient to have them on hand if you need them than to have to request them from a past employer or pay period or back-date them for past employees or payment periods.
How Long You Should Keep Your Pay Stubs As An Employer
As an employer, it is important to keep all of your employees’ pay stubs, at the very minimum, until you can reconcile them at the end of the year on your employees’ tax forms. Even then, you may want to hold onto the stubs for six years, as per the CRA, as supplemental tax records in the case of a review.
How Long You Should Keep Your Pay Stubs As An Employee
As an employee, your pay stubs will function as your only proof of income until you receive your T4 forms at the end of the fiscal year. As such, you will want to keep your pay stubs until you have over-arching proof of annual income on your tax forms. If you have multiple sources of income, are a business owner yourself, or do contract work on the side, you may want to keep your pay stubs for six years to function as supporting documents in the case of an audit.
How You Should Keep Your Pay Stubs
You have a few options when it comes to storing your pay stubs. You can use the traditional method of storing hard copies in your physical files at home or in the office, you can use a digital folder to do the same, or you can lean on a pay stub platform to store all of your information.
If you are generating pay stubs using OneTwoPay, you can rest assured that we securely store them indefinitely, in a regularly backed-up database as well as in pdf format in a backed up file storage system. You don’t have to worry about losing your information and it’s all in one easy-to-access spot.