EXHIBIT 99.1: PRESS RELEASE OF PAYCHEX, INC. DATED SEPTEMBER 27, 2005

PAYCHEX, INC. REPORTS RECORD FIRST QUARTER RESULTS

September 27, 2005

First Quarter Fiscal 2006 Highlights:

	•		Record net income of $115 million, or $0.30 diluted earnings per share.
	•		Net income increased 31% and diluted earnings per share increased 30%.
	•		Total revenue up 17%.
	•		Payroll service revenue up 10%.
	•		Major Market Services revenue increased 28%.
	•		Retirement Services revenue grew 17%.
	•		Administrative fee revenue from Paychex Premier (SM) and Professional Employer Organization increased 35%.
	•		Cash flow from operations was strong at $162 million.
	•		Increased revenue growth guidance from a range of 11% to 12% to a range of 13% to 15%.

     ROCHESTER, NY, September 27, 2005 — Paychex, Inc. (the “Company” or “Paychex”) (NASDAQ:PAYX) today announced record net income of $115.0 million, or $0.30 diluted earnings per share, for the three months ended August 31, 2005 (“the first quarter”), a 31% increase over net income of $87.7 million, or $0.23 diluted earnings per share, for the same period last year. Total revenues were $403.7 million, a 17% increase over $345.0 million for the same period last year.

     “Fiscal 2006 is off to an exceptional start as a stronger than anticipated economy caused revenues and net income to exceed our expectations,” commented Jonathan J. Judge, President and Chief Executive Officer of Paychex. “The strong economy was reflected in higher check volume growth and positive trends in new hire reporting. Along with client base growth and increased ancillary penetration, the above factors contributed to a 10% increase in Payroll service revenue to $308.6 million. Additionally, Major Market Services revenue increased 28% for the first quarter to $52.4 million.”

     Human Resource Services revenue increased to $75.8 million for the first quarter. This increase reflects growth in our clients for Retirement Services and growth in client employees served by our Paychex Premier ^(SM) Human Resources (previously referred to as Paychex Administrative Services or “PAS”) and Professional Employer Organization (“PEO”) services. Retirement Services revenue increased 17% for the first quarter to $24.6 million. Administrative fee revenue from Paychex Premier ^(SM) and PEO products increased 35% in the first quarter to $21.5 million.

     We continue to leverage our business as demonstrated by a drop in total expenses as a percentage of total service revenues to 63%, down from 65% in the same period last year. Our investments to support revenue growth contributed to a moderate increase in total operating, selling, general and administrative expenses. For the first quarter, our operating income was $162.8 million, an increase of 27% over the same period last year.

     Increases in interest on funds held for clients and corporate investment income were attributable to average interest rate and average investment balance comparisons as follows:

		For the three months ended
		August 31,
$ in millions		2005				2004
Average investment balances:
Funds held for clients		$	2,742.0			$	2,461.5
Corporate investments		$	730.5			$	529.2
Average interest rates earned:
Funds held for clients			2.7	%			1.7	%
Corporate investments			2.5	%			1.8	%

     Commenting on the current year business condition, Judge emphasized, “The first quarter was strong as we have seen the highest check volume growth we have experienced in recent years. While we are hopeful that this will continue, we cannot predict the future impact of recent hurricanes and rising gas prices. We have increased our guidance for fiscal 2006 as we now expect total revenue growth to be in the range of 13% to 15%. Assuming no further announcements to change interest rates, we expect net income growth in the range of 22% to 24%.”

     Reflecting on the destruction inflicted by Hurricane Katrina on the Gulf Coast, Judge remarked, “We are very fortunate and grateful that all of our employees have been accounted for and are safe. Additionally, our facilities in New Orleans and all of the client records in that branch office remain intact. Paychex has a business continuity plan in place to respond to unexpected events, and we successfully executed our plan, ensuring that we continued to process payroll for our clients. Through an outstanding effort by our employees in the Baton Rouge, Dallas, Houston and numerous other branch offices, we experienced minimal disruption in servicing our clients in the affected area.”

CONFERENCE CALL

     Access the webcast of the Paychex, Inc. First Quarter Earnings Release Conference Call, scheduled for September 28, 2005 at 10:30 a.m. Eastern Time, at www.paychex.com at the Investor Relations page. Paychex, Inc.’s news releases, current financial information, SEC filings, and investor presentations are also accessible at www.paychex.com. For more information, contact:

Investor Relations:		John Morphy, CFO, or
		Terri Allen		585-383-3406
Media Inquiries:		Laura Saxby Lynch		585-383-3074

ABOUT PAYCHEX

     Paychex, Inc. is a leading provider of payroll, human resource, and benefits outsourcing solutions for small- to medium-sized businesses. The company offers comprehensive payroll services, including payroll processing, payroll tax administration, time and attendance solutions and employee pay services, including direct deposit, check signing, and Readychex^®. Human Resource Services include 401(k) plan recordkeeping, workers’ compensation administration, section 125 plans, a professional employer organization, and other administrative services for business. Paychex was founded in 1971. With headquarters in Rochester, New York, the company has more than 100 offices and serves approximately 522,000 payroll clients nationwide. For more information about Paychex and our products, visit www.paychex.com.

“SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

     Certain written and oral statements made by management of Paychex, Inc. and its wholly owned subsidiaries (the “Company” or “Paychex”) may constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Forward-looking statements are identified by such words and phrases as “we expect,” “expected to,” “estimates,” “estimated,” “current outlook,” “we look forward to,” “would equate to,” “projects,” “projections,” “projected to be,” “anticipates,” “anticipated,” “we believe,” “could be,” and other similar phrases. All statements addressing operating performance, events, or developments that the Company expects or anticipates will occur in the future, including statements relating to revenue growth, earnings, earnings-per-share growth, or similar projections, are forward-looking statements within the meaning of the Reform Act. Because they are forward-looking, they should be evaluated in light of important risk factors. These risk factors include, but are not limited to, the following or those that are described in the Company’s filings with the Securities and Exchange Commission, including the Company’s most recent Form 10-K filed on July 22, 2005: changes in demand for the Company’s products and services, ability to develop and market new products and services effectively, pricing changes and impact of competition, and the availability of skilled workforce; general market and economic conditions, including, among others, changes in United States employment and wage levels, changes in new hiring trends, changes in short- and long-term interest rates, and changes in the market value and the credit rating of securities held by the Company; 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; changes in technology, including use of the Internet; the possibility of failure of the Company’s operating facilities, computer systems, and communication systems during a catastrophic event; the possibility of third-party service providers failing to perform their functions; the possibility of penalties and losses resulting from errors and omissions in performing services; the possible inability of clients to meet payroll obligations; the possibility of failure in internal controls or the inability to implement business processing improvements; and potentially unfavorable outcomes related to pending legal matters. All of these factors could cause the Company’s actual results to differ materially from its anticipated results. The information provided in this document is based upon the facts and circumstances known at this time. The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of issuance of this release, or to reflect occurrence of unanticipated events.

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PAYCHEX, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share amounts)

		For the three months ended
		August 31,
	2005				2004				% Change
Revenues:
Payroll service revenue		$	308,598			$	279,805				10	%
Human Resource Services revenue			75,817				54,398				39	%
Total service revenues			384,415				334,203				15	%
Interest on funds held for clients (A)			19,300				10,772				79	%
Total revenues			403,715				344,975				17	%
Expenses:
Operating expenses (B)			133,421				121,592				10	%
Selling, general and administrative expenses (B)			107,474				94,715				13	%
Total expenses			240,895				216,307				11	%
Operating income			162,820				128,668				27	%
Investment income, net (A)			4,859				2,259				115	%
Income before income taxes			167,679				130,927				28	%
Income taxes			52,651				43,206				22	%
Net income		$	115,028			$	87,721				31	%
Basic earnings per share		$	0.30			$	0.23				30	%
Diluted earnings per share		$	0.30			$	0.23				30	%
Weighted-average common shares outstanding			378,810				378,107
Weighted-average common shares outstanding, assuming dilution			380,180				379,706
Cash dividends per common share		$	0.13			$	0.12				8	%

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PAYCHEX, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except per share amount)

		August 31,				May 31,
		2005				2005
ASSETS
Cash and cash equivalents		$	337,321			$	280,944
Corporate investments (A)			459,853				426,666
Interest receivable			19,501				31,108
Accounts receivable, net of allowance for doubtful accounts			189,317				161,849
Deferred income taxes			24,563				21,374
Prepaid income taxes			—				5,781
Prepaid expenses and other current assets			21,969				20,587
Current assets before funds held for clients			1,052,524				948,309
Funds held for clients (A)			2,348,705				2,740,761
Total current assets			3,401,229				3,689,070
Property and equipment, net of accumulated depreciation			213,573				205,319
Intangible assets, net of accumulated amortization (B)			68,412				71,458
Goodwill (B)			405,842				405,992
Other long-term assets			6,786				7,277
Total assets		$	4,095,842			$	4,379,116
LIABILITIES
Accounts payable		$	28,978			$	30,385
Accrued compensation and related items			95,838				106,635
Deferred revenue			3,542				4,271
Accrued income taxes			43,838				—
Legal reserve			23,931				25,271
Other current liabilities			31,184				28,391
Current liabilities before client fund deposits			227,311				194,953
Client fund deposits			2,356,191				2,746,871
Total current liabilities			2,583,502				2,941,824
Deferred income taxes			17,384				17,759
Other long-term liabilities			37,023				33,858
Total liabilities			2,637,909				2,993,441
STOCKHOLDERS’ EQUITY
Common stock, $.01 par value; Authorized: 600,000 shares; Issued and outstanding: 378,988 shares at August 31, 2005, and 378,629 shares at May 31, 2005, respectively			3,790				3,786
Additional paid-in capital			248,511				240,700
Retained earnings			1,213,377				1,147,611
Accumulated other comprehensive loss			(7,745	)			(6,422	)
Total stockholders’ equity			1,457,933				1,385,675
Total liabilities and stockholders’ equity		$	4,095,842			$	4,379,116

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