Just out of coincindence, I was doing an online search for a cheaper way to do payroll (currently using Paychex and it has become way too expensive) and came across what I believe is a relatively new service from Intuit. I do not need Quickbooks so I was unable to access their Payroll software without paying the stiff Quickbooks price. But they now have an Online Payroll service for $9.95/month which handles all the taxes, tracks vacation and PTO time, fills out the quarterly reports, etc. It can Efile the taxes in many states for you also (no extra charge). Anyway, it looks great and I will likely be ditching Paychex the first of the year in favor of this. I am waiting until then so I do not have to enter all of this year's payroll information into their system. This will save me about $70/month!!
Check out
http://payroll.intuit.com/payroll_services/online_payroll.jspLeslie