Archiving -- take a copy and store it somewhere else.

Retention -- how long you keep the data in a particular store.

So you might archive a copy of your payroll database to tape once a month and send it to an offsite warehouse. So if the IRS demand to know how much you paid Joe Soap in 1998 you can root around the warehouse blow the dust of the tape and hope you did not through away the tape drive to read it with.

Your accountants may have decided to retain monthly payroll data in the payroll system for seven years. So when the IRS demand to know how much you paid Joan Soap in March 2008 you can access the data with a normal query.

Archiving -- take a copy and store it somewhere else.

Retention -- how long you keep the data in a particular store.

So you might archive a copy of your payroll database to tape once a month and send it to an offsite warehouse. So if the IRS demand to know how much you paid Joe Soap in 1998 you can root around the warehouse blow the dust of the tape and hope you did not throw away the tape drive to read it with.

Your accountants may have decided to retain monthly payroll data in the payroll system for seven years. So when the IRS demand to know how much you paid Joan Soap in March 2008 you can access the data with a normal query.