March 14, 2010

[FIRST NAME] [LAST NAME]
[COMPANY]
[ADDRESS]
[CITY], [STATE] [ZIP]

Tel: [TELEPHONE]
Fax: [FAX]
Email: [EMAIL]

Dear [FIRST NAME] [LAST NAME]:

We appreciate the opportunity to provide payroll services to [COMPANY]. To ensure an understanding between us, this letter sets forth the terms of our engagement as well as the nature and limitations of our services to you.

Payroll Calculation Services

We will provide access to a secure online payroll services account which will allow you to:

• Calculate payroll for your employees.
• Calculate and track accrued vacation and sick time or other benefits.
• Export data into one of several supported accounting programs or create spreadsheets or reports for manual entry into your system.
• View and print paystubs or paychecks and provide direct deposit for your employees.
• Calculate federal and state payroll tax deposits based on the deposit frequency you have set up.
• Prepare federal and state payroll tax forms as required and file and pay electronically if your state allows it.
• Prepare Forms W-2 and W-3 and file electronically, as well as print duplicate copies if needed.
• View and print various reports.
• View and print archived payroll information or tax forms.
• (Optional) Pay subcontractors through the system and/or create and file 1099’s.

Our Responsibility

After we receive your acceptance and payment for the first month of service, we will provide access to a secure online account to set up your payroll information.

Upon notification from you that you have completed your initial set-up, we will review the information you have entered and notify you of any amounts or settings which appear unusual or in error. However, we will not audit your information or confirm it is correct.

If requested, we will be available at a previously scheduled time to provide telephone support when you run your first payroll or make your first set of quarterly tax payments.

We will send reminders to the email account you have provided ([EMAIL]), informing you of upcoming payrolls and the amount and due date of tax payments and filings.

Your Responsibility

You will maintain a working internet connection with current browser software and update this as needed to access your account.

You will reset any default passwords we create when we set up your account and protect the security of your online login and password information. You will not hold us responsible for any fraud, theft, errors, or other acts which occur as a result of access to your account using your login and password, whether or not you authorized that access.

You will enter your current year-to-date information and confirm all balances and other information are correct, including employer and employee tax ID’s, bank account information, year-to-date payroll and tax payments, frequency of tax payments, and other information needed to correctly process payroll, compute tax liabilities or make electronic payments and filings. You will do this prior to running your first payroll or processing any tax forms or payments.

You will update your contact information as needed and promptly respond to any email requests necessary to set up electronic filings and payments, or insufficient funds or other notifications which require action on your part.

You will input payroll information on a timely and periodic basis, including hours worked, pay rates, employee status, and benefits information. You will promptly update and correct information as needed.

You will pay employees and subcontractors by direct deposit or paper checks, either through the system or after importing data into your bookkeeping software. You may optionally use the system to calculate amounts for handwritten checks. We do not provide checks.

You will maintain sufficient funds in your bank account to cover payroll expenses and related tax liabilities. You will be charged an exceptions fee if there are insufficient funds in your account when payroll or payroll taxes are debited. This is a pass-through fee which we are charged; you will promptly reimburse us for this expense. If any invoice payment is returned by your bank, a $35.00 returned check fee will apply.

Our Fees

Based on the information you have provided, you will be running payroll for 10 employee(s) and contractor(s) in 1 state(s), beginning in [MONTH]. Our fee for providing access to this service is $40.00 per month. Please include payment for this amount with your signed copy of this engagement letter. After your preliminary payment, an invoice will be sent approximately twenty (20) days in advance of each new month to the email address you have provided, which will include adjustments based on changes in the number of active employees and subcontractors or states during the prior month. Payment is due in full within ten (10 days) of the invoice date. Exceptions fees are due immediately upon receipt and may be billed separately from the usual monthly invoice.

Any adjustments in a following month will be based on:

• 1-10 employees, and/or subcontractors, 1 state: $40.00 per month
• Each additional employee or subcontractor: $1.00 per month
• Each additional state: $10.00 per month

These fees are subject to change. You will be notified at least thirty (30) days in advance of any fee change.

A one-time fee applies to create and file subcontractor 1099’s each year. You will be notified of the fee prior to creating 1099’s. Optionally, you may use the system to process subcontractor payments, then run reports to manually create and file 1099’s yourself at no charge.

Payments

At this time, payment may only be made by check payable to Jo Landers and mailed to 27 Howard Ave, Easthampton, MA 01027. Payments must be in US dollars. Payment by PayPal may be added at a future date; you will be notified if this becomes available. Automatic credit card billing is not available.

You will be notified by email to the current address on record for your account if any payment has not been received by the due date. Your account access may be suspended if any invoice remains unpaid on the first of the month for which the invoice applies. Access will be reinstated upon receipt of payment in full, including any unpaid exceptions fees or other charges.

Services not Provided

We will not audit or verify the information that you provide to us or enter into your payroll account. If an amount appears unusual, we will call it to your attention. However, we are not responsible for the detection of errors, irregularities, theft, fraud or illegal acts. We do not provide legal services.

Approvals

We are pleased to have you as a payroll client and hope that this will begin a long and pleasant association. Each of us, however, retains the right to terminate this engagement at any time.

Please sign a copy of this letter and mail it to 27 Howard Ave, Easthampton, MA 01027 with a check made out to Jo Landers in the amount of $40.00 to acknowledge your agreement with the terms of this engagement. This initial fee is based on the information you provided, which indicated payroll for 10 employees and subcontractors and 1 state(s). Later invoices will be adjusted to reflect the actual number of active employees or subcontractors and states during the prior month.

Sincerely,

__________________________________________
Jo Landers

Acknowledged: