Yes, my company has used SurePayroll and it works exactly like this. They charge fees, as well as presumably making some money on the float. The fee is around

Yes, my company has used SurePayroll and it works exactly like this. They charge fees, as well as presumably making some money on the float. The fee is around $40 per month (per employee, I suspect) and it is money well spent. There are pains associated with the service - the reporting is not entirely transparent, and when things go wrong with the automated systems I have gotten odd letters from my tax authorities which needed to be turned into support tickets (which were then handled promptly). But I would never use anything less than a payroll service. If my payroll gets more complex I might upgrade to a bookkeeper with well-documented payroll experience (at a cost which would, I suspect, be considerably higher than $40 a month), but I'd never try to do payroll myself, for reasons which are amply attested in this thread. Also, accountants. +1 for accountants.