SOURCE: PayCycle, Inc.

April 12, 2006 09:00 ET

PayCycle Announces Top 10 Cities for Tech-Savvy Small Business

Spotlight on E-Filing and Online Payroll to Cut Costs and Save Time During National Small Business Week

PALO ALTO, CA -- (MARKET WIRE) -- April 12, 2006 -- PayCycle (www.paycycle.com), the leader in on-demand payroll, in recognition of National Small Business Week today announced the top 10 cities for tech-savvy small business. According to data from the rapidly growing PayCycle customer base, small businesses in the following 10 cities lead the way in adopting online services to manage their operations:

1)  Houston, TX
2)  Los Angeles, CA
3)  San Francisco, CA
4)  New York, NY
5)  Chicago, IL
6)  Atlanta, GA
7)  Dallas, TX
8)  San Diego, CA
9)  Orlando, FL
10) Miami, FL
"Taxes are on everyone's mind right now, and small businesses across the nation are realizing that electronic filing is the way to go. Because electronic filing is a fundamental part of our service, our customer base reflects the fast-growing trend of small businesses adopting online services to save time and money," said Karen White, vice president product management for PayCycle.

PayCycle customers agree. "PayCycle is the most worry-free way of managing payroll. Using technology, like an online service such as PayCycle, lets me focus my time and energy on what I like best, building my business," said Farhana Fawcett, owner of Fawcett Center for Dentistry, Houston, TX.

Given the Internal Revenue Service's mandate to process 80% of tax returns electronically by 2007, PayCycle has taken a leading role in bringing electronic filing to small businesses using the web. PayCycle was the first IRS development partner to implement the agency's XML filing format in 2003 and was also selected as the first development partner for Illinois and Connecticut's XML-based payroll filing technology initiatives.

The PayCycle® service's unique, web-based architecture integrates with government agency electronic initiatives on the federal and state level. The company offers electronic state tax payments for over 75% of the U.S. small business population and electronic state tax filings for nearly 50% of the U.S. small business population.

According to IRS data*, a total of 5,998,396 employment tax returns, forms 940 and 941, were filed electronically by businesses during the 2005 tax year. The top five states for electronic filing of as a percentage of employment tax returns are:

1)  California
2)  New York
3)  New Jersey
4)  Florida
5)  Texas
According to the same IRS data, the bottom five states for electronic filing of employment tax returns in 2005 are:
1)  Alaska
2)  North Dakota
3)  Wyoming
4)  South Dakota
5)  Montana
In 2005, electronic employment tax filings grew 29% over 2004. Every state posted a 2005 federal e-filing increase.

*Sources: Table 4, IRS Data Book, FY 2005, Publication 55b; IRS Data Book, FY2004, Publication 55b.

About PayCycle

PayCycle is the leader in on-demand payroll, targeting small businesses and the accountants who serve them. PayCycle's mission is to make paper-based payroll obsolete. PayCycle's unique, "Do-It-With-You(SM)" (DIWY(SM)) technology platform guides customers through the entire payroll process from paychecks to W-2s. By integrating with the leading small business accounting packages, including QuickBooks® and Microsoft® Money, PayCycle eliminates the hassle of data re-entry. PayCycle is committed to having the "Most Satisfied Customers" and is a proud finalist for the 2005 American Business Association's "Stevie" award for "Best Customer Service Organization."

PayCycle is a registered trademark of PayCycle, Inc. All other product names and trademarks are the property of their respective owners.

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