As an employer you will have to keep records about your employees. This page tells you more about the records you need to keep.
What records do I need to keep?
How long do I need to keep my records?
What happens if you do not keep accurate records?
Data protection considerations
There are certain worker and employer records that you must keep by law. There are other records you may want to keep as a matter of good practice. It may be helpful to think about the ‘must keep’ records in three separate chunks – basic information, payroll records and other records and we talk about these in detail below.
In terms of the ‘may want to keep’ staff records, here we are thinking of information on matters like:
- training and appraisals
- records of lateness
- any disciplinary action you have ever taken
- terms and conditions of employment including any correspondence relating to changes to their terms and conditions, CV/application form, references and other essential checks and details of termination of employment.
Such documents may be particularly important in the event of a dispute with your PA. The information may be stored in a variety of ways such as paper files or on a computer, however where documents have been signed, e.g. an employment contract signed by the employee, it may be best to keep a hard copy of the signed document.
See our page 'taking on a new employee' for information about other personal information you may want to keep on your employee, e.g. emergency contact details, details of any work relevant disability, qualifications and so on.
As part of the starter procedure, you must gather and keep the following personal information about your employees(s) such as:
- Date of birth
- National Insurance number
- Dates of starting and leaving
It is essential you keep accurate payroll records so that HMRC can make sure that you and your employees are paying the right amount of tax and NIC, and that your employees are getting any statutory payments they are entitled to (such as sick pay and so on).
You can find more information on keeping payroll records on GOV.UK and if you are a paper filer, on page 37 of booklet RT7 – Guidance for employers exempt from filing Real Time Information online.
You should note that the required details will be recorded automatically if you use payroll software to help you with your payroll tasks. As with any computer program it is recommended you keep regular “backups”. A back up is a “snapshot” of the information on the computer program at a specific date. In any loss of data, you can then at least start off from the point of your last back up.
If you are going to carry out your payroll tasks manually (i.e. on paper), your records must include:
- employee’s gross pay (before deductions)
- their National Insurance contributions
- the amount of tax you deduct under Pay As You Earn (PAYE)
- Student Loan deductions
- tax code
- any statutory payments made, like Statutory Sick Pay and Statutory Maternity, Paternity or Adoption Pay
- any details of any taxable benefits and expenses.
Much of this will be satisfied if you keep copies of your employee’s payslips, however you must also keep your calculations for working out the tax, employees NIC and employers NIC and so on, along with details of all payments you have made to HMRC. Form RT11 will help you here.
Both online and paper filers should make sure they keep any supporting hard-copy documents somewhere safe in case HMRC want to see them. Such documents may include your employees P45 from their previous job, or starter checklist.
Top Tip: Take a photocopy of all submissions you physically post to HMRC or your employees, e.g. RT2 if you are a paper filer, P11D, P60 and send them registered post or something similar if you can.
You are also required to keep other records to prove that you are complying with things like the National Minimum Wage, auto-enrolment and other legal matters (see our employment law section for more information). You may need to supply these records in the event of a check on your compliance with the relevant laws.
When it comes to the minimum wage, it is up to you to determine what records you need to keep for these purposes, but you may be able to use existing records maintained for other purposes, such as pay, to help you. It goes without saying that you should keep details of rate of pay and hours worked including overtime and bonuses.
For auto-enrolment, by law, there are two different types of records that an employer must keep. These are:
- Records about jobholders and workers: e.g. name, National Insurance number, opt-in notice and joining notice
- Records about the pension scheme: e.g. employer pension scheme reference and scheme name and address.
You can find out more in The Pensions Regulator guidance.
In addition, you should keep records on:
- Accidents, injuries and dangerous occurrences – to meet health and safety requirements
- Holidays and other days of leave, e.g. details of any absences for sickness (you should also keep records of supporting medical evidence), maternity/paternity leave (you should also keep records of supporting evidence that the employee provided you with to claim their statutory pay) or leave for any other reason, authorised or unauthorised.
- You must also keep records to ensure that daily and weekly working time limits and night time working time limits (under the Working Time Regulations) are being complied with.
- Evidence of the employee's right to work in the UK.
There is a useful guide to these things in ACAS’s booklet on personnel data and record keeping, available on the ACAS website.
For most purposes it is sufficient that you retain your records for the current and three previous tax years. Records for 2017/18, should therefore be kept until at least 5th April 2021.
For auto-enrolment, you must keep records for a minimum of six years (except for records of opt-outs which you must keep for four years).
HMRC can ask to see your records as part of a PAYE check.
Hopefully you will not need it but for information on what to do if your records are lost, stolen, or destroyed see GOV.UK or page 38 of booklet RT7 – Guidance for employers exempt from filing Real Time Information online.
You must follow rules on data protection if you store personal information about your staff.
Under the Data Protection Act 1998 any personal information you keep on your staff should be adequate, relevant and not excessive. It must also be ‘accurate, up to date and kept no longer than is necessary’. When employers really no longer need to keep certain data, destruction must take place securely and effectively, for example by shredding.
Employees have the right to access their records. Before releasing such data to a third party, the employer must seek the permission of the individual concerned.
You must make sure the information is kept secure – e.g. in a locked cupboard or password protected and virus protected computer.
You should be aware that there are even greater security requirements in respect of ‘sensitive personal data’ including physical/mental health conditions, as if this information is compromised or lost then there could be greater harm caused to the individual.
You can find out more on data protection on the GOV.UK website.