content: SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
  
                                    FORM 8-K
  
                                 CURRENT REPORT
                       PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
  
                         Date of Report:  March 19, 2001
                       (Date of earliest event reported)
  
                                  PAYCHEX, INC.
             (Exact name of registrant as specified in its charter)
  
          DELAWARE               0-11330                   16-1124166
  (State of incorporation)     (Commission               (IRS Employer
                               File Number)           Identification Number)
  
  911 PANORAMA TRAIL SOUTH, ROCHESTER, NEW YORK            14625-0397
  (Address of principal executive offices)                 (Zip Code)
  
                                  (716)385-6666
              (Registrant's telephone number, including area code)
  
  
  ITEM 9.  REGULATION FD DISCLOSURE
  
  The registrant's press release dated March 19, 2001 is attached.  This release
  announces the Company's results of operations for the third quarter and
  nine months ended February 28, 2001.
  
  
                                   SIGNATURES
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, the
  registrant has duly caused this report to be signed on its behalf by the
  undersigned thereunto duly authorized.
  
                                          PAYCHEX, INC.
  
  Date:     March 19, 2001                /s/ B. Thomas Golisano
                                          -----------------------
                                          B. Thomas Golisano
                                          Chairman, President and
                                          Chief Executive Officer
  
  Date:     March 19, 2001                /s/ John M. Morphy
                                          -----------------------
                                          John M. Morphy
                                          Vice President, Chief
                                          Financial Officer and
                                          Secretary
  
  
  FOR IMMEDIATE RELEASE
  
  	John M. Morphy, Chief Financial Officer or Jan Shuler 716-383-3406
  
       Access the Webcast of the Paychex, Inc. Third Quarter Earnings Release
         Conference Call scheduled for March 19, 2001 at 10:30 a.m. Eastern
         Standard Time at http://www.paychex.com/paychex/finance/finance.html.
  
       Paychex, Inc. news releases, current financial information, related SEC
         filings and Investor Relations presentation are accessible at the same
         Web site.
  
                PAYCHEX, INC. REPORTS RECORD THIRD QUARTER RESULTS
  
  ROCHESTER, NY, March 19, 2001 -- Paychex, Inc. (NASDAQ: PAYX) today announced
  record net income of $66.4 million, or $.18 diluted earnings per share, for the
  quarter ended February 28, 2001, a 34% increase over net income of $49.6
  million, or $.13 diluted earnings per share, for the same period last year.
  Total service revenues were $229.3 million, an increase of 19% over $192.2
  million for the third quarter last year.
  
  For the nine months ended February 28, 2001, net income increased 35% to $187.1
  million, or $.50 diluted earnings per share, as compared to $138.4 million, or
  $.37 diluted earnings per share, for the same period last year.  Total service
  revenues were $641.2 million, an increase of 21% over $530.9 million for the
  same period last year.
  
  PAYROLL SEGMENT
  
  For the third quarter ended February 28, 2001, operating income for the Payroll
  segment increased 21% to $94.3 million from $77.7 million for the third quarter
  last year.  Total payroll service revenues were $203.7 million, an increase of
  19% over $171.8 million for the prior year period.
  
  For the nine months ended February 28, 2001, operating income for the Payroll
  segment increased 22% to $272.1 million from $222.4 million for the same period
  last year.  Total payroll service revenues were $570.2 million, an increase of
  19% over $477.6 million for the same period last year.
  
  The increases in total payroll service revenues and operating income were
  primarily the result of continued growth in the Payroll client base, increased
  utilization of ancillary services, higher rates of return and net realized
  gains on ENS investments (funds held for clients).
  
  As of February 28, 2001, 83% of Paychex clients utilized Taxpay (Registerd
  Trademark), the Company's tax filing and payment feature.  The Company's
  Employee Pay Services, which includes Direct Deposit, Readychex and Access Card
  products, was utilized by 52% of its clients. Major Market Services revenue
  increased 65% and 59% for the third quarter and nine-month periods to $13.7
  million and $34.0 million, respectively.
  
  HRS-PEO SEGMENT
  
  For the third quarter ended February 28, 2001, operating income for the HRS-PEO
  segment increased 37% from $6.8 million to $9.3 million.  HRS-PEO service
  revenue was $25.5 million, an increase of 25% over $20.4 million for the third
  quarter last year.  For the nine months ended February 28, 2001, operating
  income for the HRS-PEO segment increased 58% from $17.1 million to $26.9
  million.  HRS-PEO service revenue was $71.1 million, an increase of 33% over
  $53.3 million for the same period last year.
  
  The increases in service revenue and operating income are primarily related to
  increases in 401(k) recordkeeping, workers' compensation insurance and section
  125 clients.  401(k) recordkeeping revenue increased 34% and 41% in the third
  quarter and nine-month periods to $11.4 million and $31.5 million,
  respectively.
  
  CORPORATE EXPENSES
  
  Corporate expenses are primarily related to the Information Technology,
  Organizational Development, Finance, Marketing and Senior Management functions
  of the Company.  For the third quarter ended February 28, 2001, corporate
  expenses increased .7% to $16.7 million from $16.6 million.  For the nine
  months ended February 28, 2001, corporate expenses decreased .9% from $50.4
  million to $49.9 million.  The relatively flat year-over-year comparisons
  reflect additional expenditures to support the growth of the company offset by
  lower spending on national marketing efforts and other areas in fiscal 2001.
  Looking forward, the Company expects the growth in corporate expenses to be
  flat in the fourth quarter and up less than 10% in fiscal 2002.
  
  INVESTMENT INCOME
  
  Investment income from corporate investments for the quarter ended February 28,
  2001 increased 80% to $7.2 million from $4.0 million for the third quarter last
  year.  Investment income for the nine-month period increased 62% to $18.7
  million from $11.6 million in the prior year period. The increases are due to
  higher comparable rates of return, higher balances of investments and net
  realized gains on the sale of available-for-sale securities.
  
  INCOME TAXES
  
  The income tax rate for the third quarter and nine months ended February 28,
  2001 was 29.5% and 30.1%, respectively, as compared to 31.0% for the same
  periods last year.  The Company expects the income tax rate to approximate
  29.5% and 30.0% for the fourth quarter and full year fiscal 2001, respectively.
  
  B. Thomas Golisano, Chairman, President and Chief Executive Officer of Paychex,
  said, "We are pleased with our financial results for the first nine months of
  fiscal 2001 and look forward to completing another successful fiscal year, as
  we continue to generate revenue and profit growth from expansion of our client
  base, increased client utilization of ancillary products and leveraging of our
  infrastructure."
  
  
  "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
  1995
  
  Certain written and oral statements made by Paychex, Inc., (the "Company")
  management may constitute "forward-looking statements" as defined in the
  Private Securities Litigation Reform Act of 1995.  Forward-looking statements
  are identified by such words and phrases as  "we expect", "expects", "expected
  to", "we look forward to", "we believe", "could be" and other similar phrases.
  Because they are forward-looking, they should be evaluated in light of
  important risk factors.  These risk factors include, but are not limited to,
  general market and economic conditions, including demand for the Company's
  products and services, availability of internal and external resources,
  executing expansion plans, competition, and price levels; changes in the laws
  regulating collection and payment of payroll taxes, professional employer
  organizations, and employee benefits, including 401(k) plans, workers'
  compensation, state unemployment, and section 125 plans; delays in the
  development, timing of the introduction, and marketing of new products and
  services; changes in technology including the use of the Internet; the
  possibility of catastrophic events that could impact the Company's operating
  facilities, computer technology and communication systems; and changes in
  short- and long-term interest rates and the credit rating of cash, cash
  equivalents, and securities held in the Company's investment portfolios, all of
  which could cause actual results to differ materially from anticipated results.
  The information provided in this document is based upon the facts and
  circumstances known at this time.  The Company assumes no obligation to update
  this document for new information subsequent to its issuance.
  
  
                                   PAYCHEX, INC.
                         CONSOLIDATED STATEMENTS OF INCOME
                     (In thousands, except per share amounts)
  <TABLE>
  <CAPTION>
                           For the three months ended   For the nine months ended
                             February 28, February 29,  February 28, February 29,
                                     2001      2000(B)          2001      2000(B)
  <S>                            <C>          <C>           <C>         <C>
  Service revenues:
    Payroll                      $177,842     $155,466      $509,496    $437,044
    ENS investment revenue         25,905       16,355        60,671      40,595
                                 --------     --------      --------    --------
    Total payroll service
      revenues                    203,747      171,821       570,167     477,639
    HRS-PEO                        25,509       20,362        71,070      53,294
                                 --------     --------      --------    --------
    Total service revenues        229,256      192,183       641,237     530,933
  
  Operating costs                  54,376       45,964       147,398     126,686
  Selling, general and
    administrative expenses        87,998       78,316       244,706     215,152
                                 --------     --------      --------     --------
  Operating income                 86,882       67,903       249,133     189,095
  
  Investment income                 7,234        4,012        18,733      11,554
                                 --------     --------      --------    --------
  Income before income taxes       94,116       71,915       267,866     200,649
  
  Income taxes                     27,764       22,294        80,758      62,201
                                 --------     --------      --------    --------
  Net income                     $ 66,352     $ 49,621      $187,108    $138,448
                                 ========     ========      ========    ========
  
  Basic earnings per share(A)    $    .18     $    .13      $    .50    $    .37
                                 ========     ========      ========    ========
  
  Diluted earnings per share(A)  $    .18     $    .13      $    .50    $    .37
                                 ========     ========      ========    ========
  
  Weighted-average common
    shares outstanding(A)         373,057      370,973       372,560     370,284
                                 ========     ========      ========    ========
  
  Weighted-average shares
    assuming dilution(A)          377,681      377,723       377,558     375,309
                                 ========     ========      ========    ========
  
  Cash dividends per common
    share(A)                     $    .09     $    .06      $    .24    $    .16
                                 ========     ========      ========    ========
  </TABLE>
  
  (A) Financial information for the periods ended February 29, 2000, have been
      adjusted for a three-for-two stock split distributed in May 2000.
  
  (B) Certain amounts from the prior year are reclassified to conform to the
      current year presentation.
  
                                    PAYCHEX, INC.
                            CONSOLIDATED BALANCE SHEETS
                                  (In thousands)
  <TABLE>
  <CAPTION>
                                                    February 28,          May 31,
                                                            2001             2000
  <S>                                                 <C>              <C>
  ASSETS
  Cash and cash equivalents                           $  106,796       $   47,136
  Corporate investments                                  506,273          412,357
  Interest receivable                                     20,173           22,436
  Accounts receivable                                     89,898           87,608
  Deferred income taxes                                       --            9,539
  Prepaid expenses and other current assets                8,185            6,531
                                                      ----------       ----------
  Current assets before ENS investments                  731,325          585,607
  
  ENS investments                                      1,833,417        1,776,968
                                                      ----------       ----------
  Total current assets                                 2,564,742        2,362,575
  
  Property and equipment - net                            86,291           75,375
  Goodwill and intangible assets - net                     8,843            5,584
  Deferred income taxes                                    2,294            2,494
  Other assets                                             8,961            9,549
                                                      ----------       ----------
  Total assets                                        $2,671,131       $2,455,577
                                                      ==========       ==========
  LIABILITIES
  Accounts payable                                    $   14,116       $   17,086
  Accrued compensation and related items                  59,246           52,631
  Deferred revenue                                         6,093            4,719
  Accrued income taxes                                    21,963            2,969
  Deferred income taxes                                    1,190               --
  Other current liabilities                               22,305           24,400
                                                      ----------       ----------
  Current liabilities before ENS client deposits         124,913          101,805
  
  ENS client deposits                                  1,823,693        1,785,140
                                                      ----------       ----------
  Total current liabilities                            1,948,606        1,886,945
  Long-term liabilities                                    5,134            5,200
                                                      ----------       ----------
  Total liabilities                                    1,953,740        1,892,145
                                                      ----------       ----------
  STOCKHOLDERS' EQUITY
  Common stock, $.01 par value,
    600,000 authorized shares
    Issued:  373,323/February 28, 2001
    and 371,769/May 31, 2000                               3,733            3,718
  Additional paid-in capital                             133,434           98,904
  Retained earnings                                      566,993          469,385
  Accumulated other comprehensive income/(loss)           13,231           (8,575)
                                                      ----------       ----------
  Total stockholders' equity                             717,391          563,432
                                                      ----------       ----------
  Total liabilities and stockholders' equity          $2,671,131       $2,455,577
                                                      ==========       ==========
  </TABLE>
  
  
                                   PAYCHEX, INC.
                           BUSINESS SEGMENT INFORMATION
                                  (In thousands)
  
  The Company has two business segments: Payroll and Human Resource
  Services-Professional Employer Organization (HRS-PEO).  The Payroll segment is
  engaged in the preparation of payroll checks, internal accounting records,
  federal, state and local payroll tax returns, and collection and remittance of
  payroll obligations for small- to medium-sized businesses.  The HRS-PEO segment
  specializes in providing small- to medium-sized businesses with cost-effective
  outsourcing solutions for their employee benefits.  HRS-PEO products include
  401(k) plan recordkeeping, workers' compensation insurance administration,
  section 125 plan administration, group benefits, state unemployment insurance,
  employee handbooks and management services, Paychex Administrative Services and
  Professional Employer Organization (PEO) services.  Corporate expenses are
  primarily related to the Information Technology, Organizational Development,
  Finance, Marketing and Senior Management functions of the Company.
  <TABLE>
  <CAPTION>
                           For the three months ended   For the nine months ended
                           February 28,  February 29,  February 28,  February 29,
                                   2001          2000          2001          2000
                           ------------  ------------  ------------  ------------
  <S>                          <C>           <C>           <C>           <C>
  Service revenues:
    Payroll                    $177,842      $155,466      $509,496      $437,044
    ENS investment revenue       25,905        16,355        60,671        40,595
                               --------      --------      --------      --------
    Total payroll service
      revenues                  203,747       171,821       570,167       477,639
    HRS-PEO                      25,509        20,362        71,070        53,294
                               --------      --------      --------      --------
    Total service revenues     $229,256      $192,183      $641,237      $530,933
                               ========      ========      ========      ========
  Operating income:
    Payroll                    $ 94,259      $ 77,683      $272,121      $222,434
    HRS-PEO                       9,349         6,831        26,942        17,064
                               --------      --------      --------      --------
    Segment operating income    103,608        84,514       299,063       239,498
    Corporate expenses           16,726        16,611        49,930        50,403
                               --------      --------      --------      --------
    Total operating income       86,882        67,903       249,133       189,095
  Investment income               7,234         4,012        18,733        11,554
                               --------      --------      --------      --------
  Income before income taxes   $ 94,116      $ 71,915      $267,866      $200,649
                               ========      ========      ========      ========
  </TABLE>
metadata_documents: [{"type": "8-K", "sequence": "1", "filename": "0001.txt", "description": "FORM 8-K", "secsgml_size_bytes": 19554}]
metadata_filer: {"company-data": {"conformed-name": "PAYCHEX INC", "cik": "0000723531", "assigned-sic": "8700", "irs-number": "161124166", "state-of-incorporation": "DE", "fiscal-year-end": "0531"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-11330", "film-number": "1570932"}, "business-address": {"street1": "911 PANORAMA TRAIL S", "city": "ROCHESTER", "state": "NY", "zip": "14625-0397", "phone": "7163856666"}, "mail-address": {"street1": "911 PANORAMA TRAIL SOUTH", "city": "ROCHESTER", "state": "NY", "zip": "14625-0397"}}
text: SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
  
                                    FORM 8-K
  
                                 CURRENT REPORT
                       PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
  
                         Date of Report:  March 19, 2001
                       (Date of earliest event reported)
  
                                  PAYCHEX, INC.
             (Exact name of registrant as specified in its charter)
  
          DELAWARE               0-11330                   16-1124166
  (State of incorporation)     (Commission               (IRS Employer
                               File Number)           Identification Number)
  
  911 PANORAMA TRAIL SOUTH, ROCHESTER, NEW YORK            14625-0397
  (Address of principal executive offices)                 (Zip Code)
  
                                  (716)385-6666
              (Registrant's telephone number, including area code)
  
  ITEM 9.  REGULATION FD DISCLOSURE
  
  The registrant's press release dated March 19, 2001 is attached.  This release
  announces the Company's results of operations for the third quarter and
  nine months ended February 28, 2001.
  
                                   SIGNATURES
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, the
  registrant has duly caused this report to be signed on its behalf by the
  undersigned thereunto duly authorized.
  
                                          PAYCHEX, INC.
  
  Date:     March 19, 2001                /s/ B. Thomas Golisano
                                          -----------------------
                                          B. Thomas Golisano
                                          Chairman, President and
                                          Chief Executive Officer
  
  Date:     March 19, 2001                /s/ John M. Morphy
                                          -----------------------
                                          John M. Morphy
                                          Vice President, Chief
                                          Financial Officer and
                                          Secretary
  
  FOR IMMEDIATE RELEASE
  
  	John M. Morphy, Chief Financial Officer or Jan Shuler 716-383-3406
  
       Access the Webcast of the Paychex, Inc. Third Quarter Earnings Release
         Conference Call scheduled for March 19, 2001 at 10:30 a.m. Eastern
         Standard Time at http://www.paychex.com/paychex/finance/finance.html.
  
       Paychex, Inc. news releases, current financial information, related SEC
         filings and Investor Relations presentation are accessible at the same
         Web site.
  
                PAYCHEX, INC. REPORTS RECORD THIRD QUARTER RESULTS
  
  ROCHESTER, NY, March 19, 2001 -- Paychex, Inc. (NASDAQ: PAYX) today announced
  record net income of $66.4 million, or $.18 diluted earnings per share, for the
  quarter ended February 28, 2001, a 34% increase over net income of $49.6
  million, or $.13 diluted earnings per share, for the same period last year.
  Total service revenues were $229.3 million, an increase of 19% over $192.2
  million for the third quarter last year.
  
  For the nine months ended February 28, 2001, net income increased 35% to $187.1
  million, or $.50 diluted earnings per share, as compared to $138.4 million, or
  $.37 diluted earnings per share, for the same period last year.  Total service
  revenues were $641.2 million, an increase of 21% over $530.9 million for the
  same period last year.
  
  PAYROLL SEGMENT
  
  For the third quarter ended February 28, 2001, operating income for the Payroll
  segment increased 21% to $94.3 million from $77.7 million for the third quarter
  last year.  Total payroll service revenues were $203.7 million, an increase of
  19% over $171.8 million for the prior year period.
  
  For the nine months ended February 28, 2001, operating income for the Payroll
  segment increased 22% to $272.1 million from $222.4 million for the same period
  last year.  Total payroll service revenues were $570.2 million, an increase of
  19% over $477.6 million for the same period last year.
  
  The increases in total payroll service revenues and operating income were
  primarily the result of continued growth in the Payroll client base, increased
  utilization of ancillary services, higher rates of return and net realized
  gains on ENS investments (funds held for clients).
  
  As of February 28, 2001, 83% of Paychex clients utilized Taxpay (Registerd
  Trademark), the Company's tax filing and payment feature.  The Company's
  Employee Pay Services, which includes Direct Deposit, Readychex and Access Card
  products, was utilized by 52% of its clients. Major Market Services revenue
  increased 65% and 59% for the third quarter and nine-month periods to $13.7
  million and $34.0 million, respectively.
  
  HRS-PEO SEGMENT
  
  For the third quarter ended February 28, 2001, operating income for the HRS-PEO
  segment increased 37% from $6.8 million to $9.3 million.  HRS-PEO service
  revenue was $25.5 million, an increase of 25% over $20.4 million for the third
  quarter last year.  For the nine months ended February 28, 2001, operating
  income for the HRS-PEO segment increased 58% from $17.1 million to $26.9
  million.  HRS-PEO service revenue was $71.1 million, an increase of 33% over
  $53.3 million for the same period last year.
  
  The increases in service revenue and operating income are primarily related to
  increases in 401(k) recordkeeping, workers' compensation insurance and section
  125 clients.  401(k) recordkeeping revenue increased 34% and 41% in the third
  quarter and nine-month periods to $11.4 million and $31.5 million,
  respectively.
  
  CORPORATE EXPENSES
  
  Corporate expenses are primarily related to the Information Technology,
  Organizational Development, Finance, Marketing and Senior Management functions
  of the Company.  For the third quarter ended February 28, 2001, corporate
  expenses increased .7% to $16.7 million from $16.6 million.  For the nine
  months ended February 28, 2001, corporate expenses decreased .9% from $50.4
  million to $49.9 million.  The relatively flat year-over-year comparisons
  reflect additional expenditures to support the growth of the company offset by
  lower spending on national marketing efforts and other areas in fiscal 2001.
  Looking forward, the Company expects the growth in corporate expenses to be
  flat in the fourth quarter and up less than 10% in fiscal 2002.
  
  INVESTMENT INCOME
  
  Investment income from corporate investments for the quarter ended February 28,
  2001 increased 80% to $7.2 million from $4.0 million for the third quarter last
  year.  Investment income for the nine-month period increased 62% to $18.7
  million from $11.6 million in the prior year period. The increases are due to
  higher comparable rates of return, higher balances of investments and net
  realized gains on the sale of available-for-sale securities.
  
  INCOME TAXES
  
  The income tax rate for the third quarter and nine months ended February 28,
  2001 was 29.5% and 30.1%, respectively, as compared to 31.0% for the same
  periods last year.  The Company expects the income tax rate to approximate
  29.5% and 30.0% for the fourth quarter and full year fiscal 2001, respectively.
  
  B. Thomas Golisano, Chairman, President and Chief Executive Officer of Paychex,
  said, "We are pleased with our financial results for the first nine months of
  fiscal 2001 and look forward to completing another successful fiscal year, as
  we continue to generate revenue and profit growth from expansion of our client
  base, increased client utilization of ancillary products and leveraging of our
  infrastructure."
  
  "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
  1995
  
  Certain written and oral statements made by Paychex, Inc., (the "Company")
  management may constitute "forward-looking statements" as defined in the
  Private Securities Litigation Reform Act of 1995.  Forward-looking statements
  are identified by such words and phrases as  "we expect", "expects", "expected
  to", "we look forward to", "we believe", "could be" and other similar phrases.
  Because they are forward-looking, they should be evaluated in light of
  important risk factors.  These risk factors include, but are not limited to,
  general market and economic conditions, including demand for the Company's
  products and services, availability of internal and external resources,
  executing expansion plans, competition, and price levels; changes in the laws
  regulating collection and payment of payroll taxes, professional employer
  organizations, and employee benefits, including 401(k) plans, workers'
  compensation, state unemployment, and section 125 plans; delays in the
  development, timing of the introduction, and marketing of new products and
  services; changes in technology including the use of the Internet; the
  possibility of catastrophic events that could impact the Company's operating
  facilities, computer technology and communication systems; and changes in
  short- and long-term interest rates and the credit rating of cash, cash
  equivalents, and securities held in the Company's investment portfolios, all of
  which could cause actual results to differ materially from anticipated results.
  The information provided in this document is based upon the facts and
  circumstances known at this time.  The Company assumes no obligation to update
  this document for new information subsequent to its issuance.
  
                                   PAYCHEX, INC.
                         CONSOLIDATED STATEMENTS OF INCOME
                     (In thousands, except per share amounts)
  For the three months ended   For the nine months ended
                             February 28, February 29,  February 28, February 29,
                                     2001      2000(B)          2001      2000(B)
  Service revenues:
    Payroll                      $177,842     $155,466      $509,496    $437,044
    ENS investment revenue         25,905       16,355        60,671      40,595
                                 --------     --------      --------    --------
    Total payroll service
      revenues                    203,747      171,821       570,167     477,639
    HRS-PEO                        25,509       20,362        71,070      53,294
                                 --------     --------      --------    --------
    Total service revenues        229,256      192,183       641,237     530,933
  
  Operating costs                  54,376       45,964       147,398     126,686
  Selling, general and
    administrative expenses        87,998       78,316       244,706     215,152
                                 --------     --------      --------     --------
  Operating income                 86,882       67,903       249,133     189,095
  
  Investment income                 7,234        4,012        18,733      11,554
                                 --------     --------      --------    --------
  Income before income taxes       94,116       71,915       267,866     200,649
  
  Income taxes                     27,764       22,294        80,758      62,201
                                 --------     --------      --------    --------
  Net income                     $ 66,352     $ 49,621      $187,108    $138,448
                                 ========     ========      ========    ========
  
  Basic earnings per share(A)    $    .18     $    .13      $    .50    $    .37
                                 ========     ========      ========    ========
  
  Diluted earnings per share(A)  $    .18     $    .13      $    .50    $    .37
                                 ========     ========      ========    ========
  
  Weighted-average common
    shares outstanding(A)         373,057      370,973       372,560     370,284
                                 ========     ========      ========    ========
  
  Weighted-average shares
    assuming dilution(A)          377,681      377,723       377,558     375,309
                                 ========     ========      ========    ========
  
  Cash dividends per common
    share(A)                     $    .09     $    .06      $    .24    $    .16
                                 ========     ========      ========    ========
  (A) Financial information for the periods ended February 29, 2000, have been
      adjusted for a three-for-two stock split distributed in May 2000.
  
  (B) Certain amounts from the prior year are reclassified to conform to the
      current year presentation.
  
                                    PAYCHEX, INC.
                            CONSOLIDATED BALANCE SHEETS
                                  (In thousands)
  February 28,          May 31,
                                                            2001             2000
  ASSETS
  Cash and cash equivalents                           $  106,796       $   47,136
  Corporate investments                                  506,273          412,357
  Interest receivable                                     20,173           22,436
  Accounts receivable                                     89,898           87,608
  Deferred income taxes                                       --            9,539
  Prepaid expenses and other current assets                8,185            6,531
                                                      ----------       ----------
  Current assets before ENS investments                  731,325          585,607
  
  ENS investments                                      1,833,417        1,776,968
                                                      ----------       ----------
  Total current assets                                 2,564,742        2,362,575
  
  Property and equipment - net                            86,291           75,375
  Goodwill and intangible assets - net                     8,843            5,584
  Deferred income taxes                                    2,294            2,494
  Other assets                                             8,961            9,549
                                                      ----------       ----------
  Total assets                                        $2,671,131       $2,455,577
                                                      ==========       ==========
  LIABILITIES
  Accounts payable                                    $   14,116       $   17,086
  Accrued compensation and related items                  59,246           52,631
  Deferred revenue                                         6,093            4,719
  Accrued income taxes                                    21,963            2,969
  Deferred income taxes                                    1,190               --
  Other current liabilities                               22,305           24,400
                                                      ----------       ----------
  Current liabilities before ENS client deposits         124,913          101,805
  
  ENS client deposits                                  1,823,693        1,785,140
                                                      ----------       ----------
  Total current liabilities                            1,948,606        1,886,945
  Long-term liabilities                                    5,134            5,200
                                                      ----------       ----------
  Total liabilities                                    1,953,740        1,892,145
                                                      ----------       ----------
  STOCKHOLDERS' EQUITY
  Common stock, $.01 par value,
    600,000 authorized shares
    Issued:  373,323/February 28, 2001
    and 371,769/May 31, 2000                               3,733            3,718
  Additional paid-in capital                             133,434           98,904
  Retained earnings                                      566,993          469,385
  Accumulated other comprehensive income/(loss)           13,231           (8,575)
                                                      ----------       ----------
  Total stockholders' equity                             717,391          563,432
                                                      ----------       ----------
  Total liabilities and stockholders' equity          $2,671,131       $2,455,577
                                                      ==========       ==========
  PAYCHEX, INC.
                           BUSINESS SEGMENT INFORMATION
                                  (In thousands)
  
  The Company has two business segments: Payroll and Human Resource
  Services-Professional Employer Organization (HRS-PEO).  The Payroll segment is
  engaged in the preparation of payroll checks, internal accounting records,
  federal, state and local payroll tax returns, and collection and remittance of
  payroll obligations for small- to medium-sized businesses.  The HRS-PEO segment
  specializes in providing small- to medium-sized businesses with cost-effective
  outsourcing solutions for their employee benefits.  HRS-PEO products include
  401(k) plan recordkeeping, workers' compensation insurance administration,
  section 125 plan administration, group benefits, state unemployment insurance,
  employee handbooks and management services, Paychex Administrative Services and
  Professional Employer Organization (PEO) services.  Corporate expenses are
  primarily related to the Information Technology, Organizational Development,
  Finance, Marketing and Senior Management functions of the Company.
  For the three months ended   For the nine months ended
                           February 28,  February 29,  February 28,  February 29,
                                   2001          2000          2001          2000
                           ------------  ------------  ------------  ------------
  Service revenues:
    Payroll                    $177,842      $155,466      $509,496      $437,044
    ENS investment revenue       25,905        16,355        60,671        40,595
                               --------      --------      --------      --------
    Total payroll service
      revenues                  203,747       171,821       570,167       477,639
    HRS-PEO                      25,509        20,362        71,070        53,294
                               --------      --------      --------      --------
    Total service revenues     $229,256      $192,183      $641,237      $530,933
                               ========      ========      ========      ========
  Operating income:
    Payroll                    $ 94,259      $ 77,683      $272,121      $222,434
    HRS-PEO                       9,349         6,831        26,942        17,064
                               --------      --------      --------      --------
    Segment operating income    103,608        84,514       299,063       239,498
    Corporate expenses           16,726        16,611        49,930        50,403
                               --------      --------      --------      --------
    Total operating income       86,882        67,903       249,133       189,095
  Investment income               7,234         4,012        18,733        11,554
                               --------      --------      --------      --------
  Income before income taxes   $ 94,116      $ 71,915      $267,866      $200,649
                               ========      ========      ========      ========