What you save in payroll processing fees you will spend 50X in brain damage.

Buy Quickbooks. Buy the Quickbooks payroll service. Don't F around. I don't like Quickbooks and I don't like Intuit. I am a tax lawyer so in theory I could do all this stuff myself. I use nothing but Macs. Yet, I have a Windows machine with Quickbooks/Windows on it. I use that to run my business.

Pay whatever it takes. Give the whole problem to the outside payroll service. You're talking a few hundred bucks a year. You'll lose that in productivity and future value of your company the very first time you have to touch a payroll tax question.

Spend your money to buy yourself TIME. Servers and other techie things are just noise. The value you create comes from your time and attention, focused on your business.

If you are really only doing payrolls once a quarter, have your accountant/bookkeeper do them for you. They will probably charge more inline with your expectations. The nice thing about a payroll service like ADP or Quickbooks - they guarantee accuracy and all filings are done. You mess payroll up and the fines are large.

That said, I have a different question. Based on your payroll frequency, it seems that you might only be paying yourselves. If that's the case, have you considered NO payroll, and just dividend distribution? You seriously need to get an accountant if you haven't. Let me give you an example: You can payroll yourself somewhere around 10 to 15k per year and end up getting earned income credits that you don't get if you make too little or too much. The money you're trying to save in payroll fees is nothing compared to the thousands you could get back. Dividends can be used exclusively, or as partial, depending on your strategy.

Never go without a good accountant and a good lawyer!

We are paying ourselves. But our accountant says that since we are making some profit, we should put ourselves on payroll.

I appreciate the feedback and I do agree that time is more important than money. But money is also important when you're "ramen profitable".

I think you're confusing my comment with someone else's! Either that, or I very poorly stated my comment. I was referring to getting thousands back in earned income credit - depending on your situation. Did you know it's possible to get thousands back with your federal tax filing even if you only paid in a tiny little bit? Your accountant should be explaining this to you if he isn't. Hack the system.

Sorry, I responded to both comments at the same time. I appreciate your feedback!

Try www.patriotsoftware.com's payroll offerings. Its cheap, and should have everything you need.