Supporting Information About Paychex

To Our Shareholders

Fiscal 2014 was a significant year for Paychex, one marked by great service, product innovation, geographic expansion, and

accelerated growth.

We delivered more technology options to our clients than any other time in our history. Our ongoing investment in software-as-a-service (SaaS) solutions and mobility offerings produced best-in-class products and enhancements, which give our clients what they need to succeed in their business. This product innovation, combined with the dedicated, personal service we are known for, sets us apart from the competition and positions us to take advantage of exciting opportunities for our future.

As fiscal 2014 progressed, we began to see signs that the economic environment is gradually improving. Business startups and hiring at existing businesses showed slow but steady improvement. One way this became evident was through a new index we created and introduced this year in partnership with IHS, a leading global analytics firm. The Paychex | IHS Small Business Jobs Index, launched in April 2014, highlights small-business employment trends, something we believe we are uniquely qualified to do. Each month, using aggregated data of 350,000 Paychex clients with fewer than 50 employees – a subset of our overall client base – we report what we believe to be the most timely and accurate insight into national, regional, state, and metro employment activity. We are encouraged that after just a few months, this index has garnered national attention for Paychex.

Our 12,700 employees across more than 100 Paychex locations were key to our success this year. Their work developing, selling, and servicing our products and services produced the strongest growth in sales, client base, revenue, and profitability since the beginning of the economic downturn.

The products, technology, and personal service that drive the progress and financial performance of Paychex – and make us an industry leader – rely on the dedication of Paychex employees to generate outstanding results. I am proud of what they delivered during fiscal 2014.

Our core payroll, SurePayroll, retirement services, and HR Services sales teams produced revenue growth that generated strong momentum in fiscal 2014. In particular, our Human Resource Services revenue grew at a double-digit rate, powered in large part by demand for our HR outsourcing solutions. Our payroll services sales reached its highest increase in business sold since the recession.

Our operations organization delivered record-breaking results. Their unfailing commitment to customer service excellence led us to our best-ever client retention rate, approximately 82 percent of our client base at the beginning of fiscal 2014. And, our client satisfaction results were in line with record levels. We ended the year with approximately 580,000 payroll clients, an increase of about 2 percent over the previous year.

If numbers tell the story, then the story written by Paychex employees this year is one of excellence and impressive achievement. We made sure that nearly 10 million American workers were paid accurately and on time; that’s one in every 15 private-sector workers. We moved $600 billion for our clients and their employees. That makes Paychex the ninth-largest mover of funds based on transaction volume.

Our leadership in the retirement services industry continues. For the fourth straight year, a leading retirement industry publication ranked Paychex the number one 401(k) plan recordkeeper, with 65,000 plans. We service one of every ten 401(k)s in the country. We also continued to demonstrate our industry leadership in compliance matters, reviewing

nearly 6,500 state and federal regulatory changes during the past year to make sure that our products keep pace with the constantly shifting regulatory environment.

I think it’s also important to recognize the excellent job our employees did, coast to coast, during one of the harshest winters we’ve had, ensuring that our clients’ needs were met. Even in the worst conditions, as one storm followed another, the plans we prepare and practice in the event of emergencies or natural disasters worked extremely well, and the partnership and service commitment our employees demonstrated is a testament to the strength of our service model – always putting our clients first.

Topping off the great work of our employees, Paychex was also honored to once again receive Ethisphere Institute’s recognition as one of the World’s Most Ethical Companies. We take great pride in this distinction, as we are entrusted with some of our clients’ most important information and confidence.

Technology InvestmentsWe believe the continued investments we are making in our leading-edge technology set us apart from the competition and position us for greater long-term growth. We are a technology-enabled service business that provides our clients with market-leading SaaS solutions and mobility offerings. To support the part of our growth strategy focused on technology, we have increased our financial investment in research and development by more than 80 percent over the last six years. In the past year and a half alone, we delivered more product and functionality to our clients than at any other time in our 43-year history.

We provided several new key product features and enhancements for our clients during fiscal 2014, including a new online user interface, the ability to

update employee information across the system from one pop-up screen, and our industry-leading Paychex Report Center, which allows our clients easy access to their information and the ability to customize their reports. We are leveraging the latest technologies, our online HR administration, and time and attendance products, and integrating them with our Paychex next-generation offering.

In addition to our online capabilities, we continue to make considerable investments in our mobile applications for our clients and their employees. Among the newest features and functions in our mobile smartphone app is the ability for clients to start, edit, and submit payroll. We believe this easy-to-use app is the best in the marketplace. We see mobility as a significant growth driver. In the last year, the number of monthly and daily active users (that’s unique users in any given month or single day) climbed more than 200 percent. Paychex is well positioned to take advantage of this opportunity.

Acquisitions and PartnershipsWe are also taking advantage of opportunities to grow through acquisition. Technology played a key role in our acquisition strategy during the past year as we moved into new markets. As the fiscal year closed, we acquired a leading cloud-based time and attendance company, accelerating our ability to deliver the latest SaaS-based time and attendance functionality to the markets we serve. By combining the development expertise of nettime solutions, LLC with the service excellence of Paychex, we will drive faster growth in this part of our business.

We also entered a strategic partnership with a leading cloud-accounting provider. The equity investment in Kashoo, a Canada-based provider of cloud-accounting software, set the stage for us to introduce a new product line. With Kashoo, we created and delivered Paychex

Accounting Online, a SaaS solution that gives small-business owners an easy way to manage financial records. It also gives Paychex an opportunity to partner with new businesses as they grow, and to combine this functionality with our payroll and HR solutions.

We grew geographically, too, during the last year through acquisitions and partnerships. We doubled our presence in Germany by acquiring Lohndata, a leading payroll provider in Berlin.

We expanded into Brazil during fiscal 2014 through a joint venture and are now offering payroll to small businesses in São Paulo. We partnered with Semco Partners, a company with a proven track record of helping market-leading businesses successfully enter the Brazilian market. With about five million small businesses that account for approximately 40 percent of the wages paid in Brazil, as well as increasingly challenging regulatory requirements, we believe Brazil is the right place for our Latin American expansion.

Product OpportunityIn the U.S., expansion included moving into new sales territories and growing existing ones. Members of the Paychex sales team helped drive results through new and traditional avenues. In addition to our continuing success with the CPA community as a key referral source, our more recent increased focus on franchises and banks has created new sources of business for Paychex. We signed a payroll partnership agreement with Restaurant Supply Chain Solutions, the exclusive supply chain management organization for Yum! Brands, one of the world’s largest restaurant companies with familiar brands including KFC, Pizza Hut, and Taco Bell. In addition, we gained 15 new bank referral partners.

We also expanded our virtual sales team that directly sells products such as payroll, time and attendance, and

insurance in certain markets. A new product that this team is also selling across the U.S. is Paychex Payment Processing Services, a full suite of payment processing solutions that includes credit and debit card processing, mobile and online payment services, and point-of-sale solutions for small businesses. We are partnering with Elavon, a leading global payments provider, for this offering.

One area where the partnership we have with our clients is proving especially important is health care reform. In fiscal 2014, we introduced new products to help our clients manage the complex compliance requirements tied to the Affordable Care Act (ACA). With the legislation having potentially far-reaching effects on businesses and their employees, we moved forward with rollout of our product offerings, including the Paychex Employer Shared Responsibility Service, designed to make it easier for business owners to comply if the employer shared responsibility provision applies to them. We also introduced the Paychex Employer Shared Responsibility Complete Analysis and Monitoring Service for clients who want a more robust solution.

Research we conducted during the past year found that 46 percent of small business owners with fewer than 100 employees don’t fully understand what’s expected of them to comply with the Affordable Care Act. That’s why we continue to believe health care reform is a good opportunity for us, even though various changes in ACA rules over the past year did cause some clients to delay product purchasing decisions or put off making changes to health care plans.

We can provide clients with the most up-to-date information on the latest requirements. As both a payroll provider and insurance agency, we are uniquely positioned in the marketplace to help small businesses navigate these regulations. The leadership of our Paychex Insurance Agency is recognized nationally.

Ranked as the 25th largest broker in the United States by Business Insurance magazine, it now has nearly 110,000 clients across the country.

Financial ResultsOur financial results also reached new record levels for Paychex.

Total service revenue for the year was $2.5 billion, up 8 percent over fiscal 2013. Payroll service revenue rose 4 percent to $1.6 billion for the same period. Human Resource Services revenue continued its record of double-digit growth, climbing 18 percent to $879 million. Operating income increased 9 percent to $942 million. Net income and earnings per share were up 10 percent to $628 million and $1.71, respectively.

We continue to be debt free and have a strong liquidity position, with cash and total investments of $937 million, compared to $875 million in fiscal 2013. This significant cash balance, which provides flexibility in our investments and acquisitions, was achieved while taking shareowner-friendly actions, including increasing our dividend 6 percent last July, returning $511 million, or 81 percent, of net income to shareholders. During fiscal 2014, we also executed a stock repurchase program and acquired nearly $250 million worth of Paychex stock.

Positioned For GrowthGrowth is the reward we earn from the investments we’ve made in our business. The opportunity we have to take that growth to the next level, to accelerate our success, is significant, and Paychex is positioned to take advantage of that opportunity.

We will continue to deliver product enhancements and innovative technology, integrating the latest features and functionality our clients want with the

dedicated service model that differentiates us from the competition. Our message to business owners is clear: We want to help you succeed by providing the service and products that allow you to focus on your business.

I want to thank the Paychex shareholders, Board of Directors, clients, and employees for being an important part of our success during the past year.

Sincerely,

Martin Mucci

President and CEO

2010 2011 2012 2013 2014

Results of Operations

Selected Financial Data

1Refer to the Overview section of Item 7 of our Annual Report on Form 10-K for the year ended May 31, 2014, for further information.

In millions, except per share amounts

Year ended May 31,

2014 2013 Increase/ (Decrease)

Service revenue $ 2,478.2 $ 2,285.2 8% Interest on funds held for clients 40.7 41.0 (1%)

Total revenue $ 2,518.9 $ 2,326.2 8%

Operating income $ 982.7 $ 904.8 9%

Net income $ 627.5 $ 569.0 10%

Diluted earnings per share $ 1.71 $ 1.56 10%

Cash dividends per common share $ 1.40 $ 1.31 7%

Year ended May 31,

2014 2013

Operating income, net of certain items1 $ 942.0 $ 863.8 Purchases of property and equipment $ 84.1 $ 98.7 Cash flows from operations $ 880.9 $ 675.3 Cash and total corporate investments $ 936.8 $ 874.6 Total assets $ 6,370.1 $ 6,163.7 Total debt $ - $ - Stockholders’ equity $ 1,777.0 $ 1,773.7 Dividends paid as a percentage of net income 81% 84% Return on stockholders’ equity 35% 34%

F I NANCI AL HIGHLIGHTS

2010 2011 2012 2013 2014

$ M

illio

ns

Fiscal Year

689 738

810864

942

$ M

illio

ns

Fiscal Year

1,946 2,0362,186 2,285

2,478

Service Revenue Operating Income, Net of Certain Items1

Sarbanes Oxley Compliance

Report on Management’s Assessment of Internal Control Over Financial Reporting

Management of Paychex, Inc. (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of May 31, 2014. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control — Integrated Framework” (1992). Based on our assessment, management determined that the Company maintained effective internal control over financial reporting as of May 31, 2014.

The Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, is appointed by the Company’s Audit Committee. PricewaterhouseCoopers LLP has audited the Consolidated Financial Statements included in this Annual Report on Form 10-K and the effectiveness of the Company’s internal control over financial reporting as of May 31, 2014, and as a part of their integrated audit, has issued their report, included herein, on the effectiveness of the Company’s internal control over financial reporting.

Source: PAYCHEX, INC., 10-K, July 22, 2014

/s/ Martin Mucci

Martin Mucci

President and Chief Executive Officer

/s/ Efrain Rivera

Efrain Rivera

Senior Vice President, Chief Financial Officer, and Treasurer

Report of Independent Registered Public Accounting Firm

Report on Management’s Assessment of Internal Control Over Financial Reporting

To the Board of Directors and Stockholders of Paychex, Inc.

In our opinion, the accompanying consolidated balance sheet as of May 31, 2014 and the related consolidated statements of income and comprehensive income, of stockholders’ equity, and of cash flows for the year then ended present fairly, in all material respects, the financial position of Paychex, Inc. and its subsidiaries as of May 31, 2014, and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 8 for the year ended May 31, 2014 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of May 31, 2014, based on criteria established in Internal Control — Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report on Management’s Assessment of Internal Control Over Financial Reporting. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company’s internal control over financial reporting based on our integrated audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audit of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP Rochester, New York July 22, 2014 PricewaterhouseCoopers LLP

Source: PAYCHEX, INC., 10-K, July 22, 2014

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Paychex, Inc.

We have audited the accompanying consolidated balance sheet of Paychex, Inc. as of May 31, 2013, and the related consolidated statements of income and comprehensive income, stockholders’ equity, and cash flows for each of the two years in the period ended May 31, 2013. Our audits also included the financial statement schedules listed in the Index at Item 15(a) for the years ended May 31, 2013 and 2012. These financial statements and schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Paychex, Inc. at May 31, 2013, and the consolidated results of its operations and its cash flows for each of the two years in the period ended May 31, 2013, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedules for the years ended May 31, 2013 and 2012, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.

/s/ Ernst & Young LLP

Rochester, New York July 22, 2014 Source: PAYCHEX, INC., 10-K, July 22, 2014

Source: PAYCHEX, INC., 10-K, July 22, 2014

Code of Business Ethics and Conduct Full text available online at: static.paychexinc.com/a/d/investor/ethics_code.pdf

The Paychex Code of Business Ethics and Conduct organizes a set of company standards for proper business conduct so you can gain a better understanding of the way Paychex wishes to conduct business. Paychex maintains a strong belief in the value of ethical behavior. The trust and confidence of the public, our stockholders, our clients, and each of us as employees is a critical asset that benefits all.

All members of the Paychex board of directors, all officers, and all Paychex employees (collectively referred to as “employees” throughout this code), are expected to read and understand this Code of Business Ethics and Conduct. Each of us is personally responsible for making sure that our business decisions and actions comply at all times with the letter and spirit of this Code.

In addition, each of us has a duty to report behavior on the part of others that appears to violate this Code or any other compliance policy or procedure of Paychex. Ethical concerns, questions, or complaints may be raised with your immediate supervisor, Human Resources, or submitted directly to the Audit Committee as outlined within this Code. All concerns, questions, and complaints will be taken seriously and handled promptly and confidentially. No retaliation will be taken for raising any concern, question, or complaint in good faith.

Privacy Statement

Paychex, Inc. is committed to providing payroll processing, payroll tax preparation, and human resource solutions for your small- to medium-sized business. In an effort to meet that commitment, you will have to provide to Paychex business, financial, and/or personal information about yourself and your employees. Your privacy and the privacy of the information provided are important to us. Paychex protects the security of your business, financial, and personal information and honors your choices for its intended use. Paychex uses reasonable care and maintains appropriate policies and procedures to protect your data from loss, misuse, unauthorized access, disclosure, alteration, or destruction.

Paychex does not sell or disseminate customer information to any third parties under any circumstances, except to fulfill legal and regulatory requirements, and to facilitate customer requested transactions. Third party service providers with access to client information are required to keep that information confidential and use it only to provide services for Paychex or the client.

Business Continuity Plan

Paychex, Inc is dedicated to providing seamless business operations in spite of unexpected events. These sudden, uncontrollable scenarios can vary from inclement weather to intentionally damaging acts. The impact of each scenario, depending on its severity, can range from minimal to critical. The Company is committed to identifying potential risks and evaluating their potential impacts - before the situation occurs to determine what appropriate measures should be taken.

To ensure a rapid response to potential harmful situations, the Company has developed a combination of technological solutions and comprehensive recovery planning strategies.

• Duplicate copies of data (backups) of employer and employee master files and tax files are performed daily at the Corporate Data Centers and each processing location.

• Payroll transaction files are backed up throughout each processing day.

• Weekly backups are performed for payroll history.

• Business critical application transaction files are electronically transmitted throughout each processing day.

• Backup tapes and other critical supplies needed to process payrolls, such as client contact lists and payroll forms, are stored off-site.

The Corporate Data Centers have appropriate geographic separation for incidents of local and regional disaster, and are equipped with heat, smoke detection, fire suppression systems, redundant uninterruptible power systems (UPS) and redundant generator power. In addition, the branch offices are equipped with heat, smoke, and fire detection systems. Certain branches have a UPS and generator that protect computers, phones, and alarm systems from power surges or failures. Power failure tests are performed in each corporate processing data center and at each branch annually. Each Data Center operates independently, and is designed to handle the full load of all centers.

Comprehensive plans are in place for each critical business unit and each Paychex location to ensure the timely relocation of critical personnel to alternate work spaces. These plans are tested multiple times each year.

A dedicated team of business continuity professionals are involved with creating and maintaining business continuity strategies.

Security Statement

A Commitment to Security

Paychex is committed to protecting the security and integrity of our customer information through procedures and technologies designed for this purpose. Here are some of the things we do with our technology and our internal training to ensure that your information in our systems is protected:

• We maintain policies and procedures covering the physical security of our workplaces, systems, and records.

• Our physical, electronic, and procedural safeguards are built on industry recognized best practices.

• We use technological means such as backup files, virus detection and prevention, firewalls, and other computer hardware and software to protect against unauthorized access or alteration to customer data.

• We encrypt sensitive information that is transmitted over the Internet.

• We limit employee access to customer information to those who have a business reason to know through formal approval processes, access controls, and internal auditing.

• We require our employees to take information security awareness training and to apply this training to their job every day.

• We use advanced technologies for the backup and recovery of customer information.

Certificate of Liability Insurance

Certificate of Property Insurance

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800-322-7292paychex.com/mms