You're not missing anything.

Over the years (and I've had many) I've tried them a couple of times. Never kept them over 90 days. They do make mistakes and they do cost money.

The reason some small businesses "hire out" their payroll is because they have a tendency to forget deadlines, including making deposits on time. They want somone else to shoulder the responsibility.

Actually, there is no reason why you can't do your own. All of the accounting programs have psyroll built in, or you can buy a stand-alone payroll program for under $ 100 that will do all the forms for you.

Or, you can do it using the tables provided by the IRS. Particularly if you pay yourself a salary, it's just the same thing each pay period. Go in the tables one time, set it up and repeat each payday.