If you have a few needs that Paychex provides, then I definitely recommend them. It really is a huge savings in time and money to have one company handle multiple requirements. If the only issue is payroll, I might see if there is a smaller local company that could do it. If you only do payroll, Paychex doesn't offer a lot that others wouldn't. Our need for government compliance is huge in our business, so Paychex fills a big need there. If we didn't have that need, I would consider looking elsewhere.
As we increased from one branch to three, we very quickly were overwhelmed by the time involved to handle payroll ourselves. Our employee count more then tripled, and we needed outside help. If it was just the checks, we could have handled it; but when we factored in deductions, tax enforcement, back child support, etc., it was too much. We also try to maintain an "employees are family" environment, and honestly it became uncomfortable sometimes when employees had questions about liens, back child support, etc.
Once we decided to hire a service, we asked around and came up with 3 possibilities. We contacted all three and asked them to put together a proposal, and we liked Paychex the best. It wasn't the cheapest, but they seemed like the best choice. They handle deductions, direct deposit, court liens, W-2 preparation, benefits, and compliance. We get money from the government, and they have very strict/specific rules and requirements. Paychex handles that for us and they make sure to notify us as compliance requirements change. They also do background screening and drug tests.
In addition, they have a rep come about once a month to make sure we are satisfied and to show us new services they offer. It can be costly, but if we make even one mistake in government compliance, we can be fined thousands of dollars. If we didn't have Paychex, we would probably have to hire someone full-time. They most likely wouldn't be able to do even half of what Paychex does, so the cost is worth it.
Honestly, even though this might sound silly, but the number one benefit for me is having them handle "negative issues" such as drug testing, liens, etc. We consider our employees family, and I think that if we had to be the ones telling an employee they needed a drug test or that the IRS put a lien on their pay, it would plant a seed of negativity that would eventually hinder the positive environment we work hard to provide. One angry employee talking in the break room can easily influence others to perceive issues where there are none. If an employee has an issue, now we can kind of "blame" Paychex; and in the day or two it takes to straighten out the issue, the employee has time to calm down.
I like the options they have. Their services can go far beyond paychecks, and I like that. Plus, its always cheaper to have one company handle a group of services. I also like the rep coming in person once a month. It is the same person which lets us build up trust while she learns about our needs. She has recommended a couple services we didn't even consider. If it had been a different person every month, it's unlikely they would become familiar enough with us to know what we might want.
They can be inflexible sometimes. We had employees asking for a couple years if we could make their direct deposit go to multiple banks. Some had family overseas, and it would save money and time if they could have part of their pay go directly to the relative's account. Recently, Paychex has started allowing it, but I wish it had been sooner. As they grow and expand, I worry about them becoming spread too thin.