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Run the Payroll Fee Auditor →Blog · Payroll Management · Cannabis
Cannabis Businesses: Payroll Recordkeeping Requirements (2026)
Payroll recordkeeping for cannabis businesses starts at the federal baseline, three years for payroll records and two for the time records behind them, then adds what reaches this industry: California Department of Cannabis Control regulations, section 15037 (revised July 1, 2026) and FinCEN FIN-2014-G001. BEG: $45 per employee per month inside the payroll software you already use, live in 3 to 5 days.
Records specific to cannabis businesses
California cannabis licensees must keep personnel records showing each employee's full name, Social Security number or ITIN, date employment began and date of termination, plus training records listing the content and the employees trained, for at least seven years from the date of creation, in a form that can be produced to the Department of Cannabis Control on request.
FinCEN guidance FIN-2014-G001 directs banks that serve marijuana-related businesses to file Suspicious Activity Reports on those accounts and states that currency transaction reporting applies at the same thresholds as for any other business: banks file CTRs on more than $10,000 in cash per day, and any non-financial business must report cash receipts over $10,000.
An employee who customarily and regularly receives more than $30 a month in tips is a tipped employee under the FLSA. An employer may pay a cash wage of at least $2.13 per hour and take a tip credit of up to $5.12 per hour toward the $7.25 minimum wage, must give the employee notice before taking the credit, and may never keep any portion of employee tips.
The federal baseline every employer keeps
29 CFR 516 requires payroll records for three years and the records they were computed from, time cards, schedules and piece or commission records, for two years. Employment tax records stay four years after the return they support. Forms I-9 stay three years from hire or one year from separation, whichever is later. For cannabis businesses the practical rule is that the pay codes for 280E tax code payroll deductions and cash payroll documentation produce records of their own, and an audit reads those, not the summary.
The rules behind this page, with sources
General information, not legal advice. Every rule below was read on the agency page linked next to it.
- California cannabis licensees must keep personnel records showing each employee's full name, Social Security number or ITIN, date employment began and date of termination, plus training records listing the content and the employees trained, for at least seven years from the date of creation, in a form that can be produced to the Department of Cannabis Control on request. [California Department of Cannabis Control regulations, section 15037 (revised July 1, 2026)]
- FinCEN guidance FIN-2014-G001 directs banks that serve marijuana-related businesses to file Suspicious Activity Reports on those accounts and states that currency transaction reporting applies at the same thresholds as for any other business: banks file CTRs on more than $10,000 in cash per day, and any non-financial business must report cash receipts over $10,000. [FinCEN FIN-2014-G001]
- An employee who customarily and regularly receives more than $30 a month in tips is a tipped employee under the FLSA. An employer may pay a cash wage of at least $2.13 per hour and take a tip credit of up to $5.12 per hour toward the $7.25 minimum wage, must give the employee notice before taking the credit, and may never keep any portion of employee tips. [DOL Fact Sheet #15]
Read the full guide to how to prepare for a payroll audit, and the rest of the cannabis business payroll library.
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Frequently Asked Questions
Cannabis business records: California Department of Cannabis Control regulations, section 15037 (revised July 1, 2026)
California cannabis licensees must keep personnel records showing each employee's full name, Social Security number or ITIN, date employment began and date of termination, plus training records listing the content and the employees trained, for at least seven years from the date of creation, in a form that can be produced to the Department of Cannabis Control on request.
Cannabis business records: FinCEN FIN-2014-G001
FinCEN guidance FIN-2014-G001 directs banks that serve marijuana-related businesses to file Suspicious Activity Reports on those accounts and states that currency transaction reporting applies at the same thresholds as for any other business: banks file CTRs on more than $10,000 in cash per day, and any non-financial business must report cash receipts over $10,000.
How long does a cannabis business keep payroll records?
Three years for payroll records and two for supporting time records under the FLSA, four years for employment tax records under the IRS rule, and longer where an industry rule cited above says so.
What does managed payroll cost for a cannabis business?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. 280E tax code payroll deductions, cash payroll documentation and state cannabis board reporting are configured at setup, not billed as add-ons.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Cannabis Businesses. BEG manages payroll at $45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: U.S. Department of Labor: Wage and Hour Division
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