---
title: "Payroll Bookkeeping Records: UK Employer Guide 2026/27"
description: "**UK employers must keep payroll records showing employee pay, deductions, HMRC reports, tax payments, leave, sickness, tax codes and taxable benefits.** HMRC requires PAYE records to be retained for three years from the end of the tax year to which…"
url: "https://www.accountingfirms.co.uk/knowledge-bank/what-records-do-i-need-to-keep-for-payroll-bookkeeping/"
updated: "2026-08-12"
category: Bookkeeping
---

# Payroll Bookkeeping Records: UK Employer Guide 2026/27

**UK employers must keep payroll records showing employee pay, deductions, HMRC reports, tax payments, leave, sickness, tax codes and taxable benefits.** HMRC requires PAYE records to be retained for three years from the end of the tax year to which they relate.

Payroll bookkeeping should also reconcile every Real Time Information submission to the payroll reports, nominal ledger, bank and HMRC account.

## Core payroll records

HMRC says employers must collect and retain records of:

- what each employee was paid;
- PAYE Income Tax, National Insurance and other deductions;
- Full Payment Submissions (FPS) and Employer Payment Summaries (EPS);
- payments made to HMRC;
- employee leave and sickness absences;
- tax-code notices;
- taxable expenses and benefits; and
- Payroll Giving Scheme contracts and employee authorisations.

## Employee starter information

Keep the information used to set up each worker:

- full legal name, address, date of birth and gender marker required by payroll;
- National Insurance number;
- start date;
- P45 details or starter checklist declaration;
- tax code and student or postgraduate loan status;
- pay frequency, salary or hourly rate and contracted hours;
- bank details, stored securely;
- workplace pension assessment and communications; and
- evidence supporting employment status where relevant.

Inaccurate starter data can create duplicate employments or incorrect tax codes.

## Records for every pay period

The payroll report should show:

- gross pay and pay period;
- basic pay, overtime, bonuses and commission;
- statutory payments;
- taxable benefits processed through payroll;
- employee and employer National Insurance;
- PAYE tax;
- pension contributions;
- student and postgraduate loan deductions;
- attachments of earnings and other authorised deductions;
- net pay; and
- year-to-date totals.

Retain timesheets, overtime approval, bonus calculations and other evidence behind the figures.

## Real Time Information records

An FPS is normally sent on or before employees are paid. Keep:

- the submission file or detailed report;
- HMRC acceptance acknowledgement;
- submission date and unique identifiers;
- any late-reporting reason;
- corrections and revised year-to-date values; and
- EPS submissions for recoveries, allowances or no-payment periods.

A saved draft is not evidence that HMRC accepted the submission.

## Payroll journal for bookkeeping

The journal normally separates:

- gross wages and salaries;
- employer National Insurance;
- employer pension cost;
- PAYE and employee NIC liability;
- employee and employer pension liability;
- student-loan and other deductions;
- net wages payable; and
- statutory-payment recoveries or employment allowances.

Posting only the net bank payment understates staff costs and liabilities.

## Monthly payroll reconciliation

1. Agree gross pay to contracts, timesheets and approved changes.
2. Agree net pay to the bank payment file.
3. Reconcile PAYE, NIC and deductions to the FPS/EPS and HMRC account.
4. Reconcile pension contributions to the pension-provider schedule.
5. Confirm payroll-control balances represent amounts genuinely unpaid.
6. Investigate rejected or duplicate submissions.
7. Post the approved journal into the accounting system.

## Leave and statutory-payment records

Keep dates, entitlement calculations and evidence for:

- annual leave and holiday pay;
- sickness absence and Statutory Sick Pay;
- maternity, paternity, adoption, parental-bereavement and shared-parental pay; and
- other statutory leave introduced or amended by legislation.

Retention rules for particular statutory payments may extend beyond the general PAYE period. Follow the specific scheme guidance.

## Pensions and automatic enrolment

Payroll records should show assessment category, enrolment date, postponement, opt-in or opt-out, pensionable pay, contributions and communications. The Pensions Regulator has separate record-retention requirements, some longer than HMRC's three-year PAYE rule.

## Benefits and expenses

Keep P11D data or payrolled-benefit records, including how values were calculated. Retain mileage logs, company-car details, fuel records, loans, medical cover and expense claims.

See our [2026/27 business mileage guide](https://www.accountingfirms.co.uk/knowledge-bank/how-do-i-track-and-report-business-mileage-for-bookkeeping/).

## How long should records be kept?

HMRC's general PAYE requirement is three years from the end of the relevant tax year. Other laws can require longer retention, including:

- minimum-wage records;
- workplace-pension records;
- company accounting records;
- immigration right-to-work evidence; and
- documents needed for legal disputes.

Apply the longest relevant period and a documented retention policy.

## Data protection and security

Payroll contains sensitive identity and financial data. Limit access, use multi-factor authentication and encryption, control exports, review former-user access and maintain tested backups.

Do not email unprotected payroll files or retain employee data indefinitely without a lawful purpose.

## Lost or destroyed records

HMRC says the employer should report irreplaceable loss promptly, make every reasonable effort to recreate records and indicate whether final payroll figures are estimated or provisional.

HMRC may estimate the tax due and impose a penalty of up to £3,000 where full records are not kept.

## Frequently asked questions

### Are payslips enough?

No. Payslips are only one output. The employer also needs source data, RTI acknowledgements, tax payments, leave, codes, benefits and reconciliations.

### Can payroll reports be kept digitally?

Yes. They must remain complete, secure, readable and retrievable throughout the retention period.

### Should payroll records match the accounts?

Yes. Gross pay and employer costs should reconcile to the profit and loss account, while unpaid deductions and net pay should reconcile to balance-sheet liabilities.

## Official source

See [GOV.UK: PAYE records for employers](https://www.gov.uk/paye-for-employers/keeping-records). Check separate HMRC and Pensions Regulator rules for specific statutory payments and pension records.