Employers must at all times observe the statutory periods for the archiving and destruction of documents. In this article, we return to the topic, taking a closer look this time at payroll accounting.
The payroll accounting – that is to say, records and documents created or obtained by the employer in connection with the accounting of wages and salaries, the contributions to health and social insurance, and the deduction and payment of advances on wage tax –must be kept for certain time periods prescribed by law. The Accounting Act stipulates a general archiving period of 10 years for the financial statements and the annual report and of 5 years for accounting vouchers and other records (calculated in each case from the end of the relevant accounting period).
The Pension Insurance Act provides for special archiving periods concerning wage tax records and other important payroll data needed for the calculation and disbursement of pension benefits (30 or, as the case may be, 10 years). The Sick-Leave Insurance Act in turn provides for a special archiving period concerning relevant records for the calculation and disbursement of sick leave benefits (10 years).
Summarizing the above information, we find that the various components of payroll accounting are subject to the following archiving periods:
- Wage tax records and other payroll data of relevance for pension insurance: min. 30 years (or, in the case of wage tax records of recipients of an old-age pension, 10 years);
- Records of the origination and termination of employment relationships and of the number of years spent in employment: min. 10 years;
- Documentation of wages/salaries and of drawn sick-leave benefits: min. 10 years;
- Copies of social security cards: min. 3 years.
Companies as employers must keep a list of their shareholders and of the members of their management and supervisory bodies (by individual calendar months) for the period up until 2014, including an overview of those months for which the company failed to pay social security contributions or the special contribution (levy) for state employment policy; these documents must be archived for six years from the month to which the given information relates, and for at least three years from the moment in which the outstanding contribution to social security was paid. Once the statutory archiving periods have lapsed, it is expedient and advisable to destroy the records. The preferred method is shredding them and protocoling their destruction.
Special attention should be paid to the set-up of a proper archiving system, because employers may be punished for non-adherence to the archiving periods under the law.
Additional information about archiving and destroying records in financial accounting can be found here.
Accounting Act (Act No. 563/1991 Coll.), Income Tax Act (Act No. 586/1992 Coll.)