Phone: 970.259.6960
Fax: 970.259.5331
2530 Colorado Ave, Suite 2B
Durango, CO 81301
Email: [email protected]
Hello Payroll Department Client:
We need your signature! Attached you will find changes to our agreements which require a signature from a
person in your organization. This person needs to meet any of the following requirements:
• 50% or greater owner of the business with authority to enter into agreements.
• An officer of the corporation.
• Any person who has the authority to sign the Federal Form 941 on behalf of the employer.
Following is a summary of the fine print in the attached agreements:
The first is our “Tax File & Pay Terms of Agreement.” There are three places to initial and one place for a
signature. This has been modified to reflect our objective to process your payroll under your instructions.
The IRS has placed a great emphasis on payroll service bureaus such as ours that we are “mechanical in
nature.” In other words, we will not provide you with any kind of opinion regarding your payroll or any other
matter pertaining to your business – although we certainly will provide you with information to help you
make a decision. We are also asking for any authorized payroll contacts in addition to yourself.
The second is the “EFT Agreement” for Electronic Funds Transfer. There are two places to initial and one
place for a signature. As a result of new rules adopted by NAACHA – the agency that regulates, among other
items, the electronic activity such as direct deposits among banks, we are required to undergo an annual
audit. After going through our first audit, one of the requirements was to change the language we have in our
current EFT agreement. The new agreement:
• Makes clear that we are carrying out your instructions
• That you are not a terrorist nor is payroll funded by a foreign bank account
• That you are ultimately responsible for insuring that the amount of funds you authorized for your
payroll are indeed available to cover your liabilities
If you have ANY questions regarding either one of these forms, please contact us. We want to make sure you
understand why we are doing this and what permissions / disclosures we are asking you to make.
Please fax, email or snail mail all five pages back to us at the above as soon as possible – or by May 17th at the
latest.
We realize this requires time and energy on your part to provide us with this information. Thank you VERY
MUCH for helping us carry out this task.
Sincerely,
Bryan Dear and Eric Malone
Welcome to TAX, FILE & PAY:
This is our agreement – Please read it carefully initializing where indicated
Congratulations! You (Client), ____________________________________, are on the verge of eliminating a big step of
your payroll to-do’s. The Payroll Department, Inc. (PDI) will collect from you and remit your payroll taxes to the appropriate
agencies and file your payroll tax returns to the appropriate agencies based on the information you provide to us.
Client is responsible for the accuracy of the Client Information provided by Client’s designated personnel. PDI will not be
responsible for errors that result from PDI’s reliance on Client Information. Client will review all reports and documents
provided by PDI, and it is the Client’s obligation to check the payroll and related documents for accuracy in a timely manner.
Delivery and processing schedules will be determined and agreed upon by the parties on an annual basis, but may be
changed from time to time by mutual consent of Client and PDI. The accuracy of the services PDI provides is limited by the
nature of the information provided by the Client. PDI cannot be held liable for Client errors, wage and hour violations, sex
discriminations, or other employment policies which may violate any State or Federal law. If the data submitted by the
Client for processing is incorrect or incomplete, Client agrees to pay PDI its standard rate in effect for any additional work
performed to correct such data for processing. Client acknowledges that PDI is not rendering any legal, tax, or accounting
advice in connection with the services provided and is in essence, “mechanical in nature” in the provision of their services.
____ (initial)
Client agrees PDI will act as the tax filing agent where required for IRS and respective states client uses for deposits, filing
and correspondence on client’s behalf related to these payroll tax filings. PDI accepts both responsibility and liability for the
timely payment and report of client’s payroll taxes based on information furnished by client and only to the extent of funds
made available by client. If client incurs a penalty or interest charge solely on account of negligent error or omission on the
part of PDI with respect to timely payments from funds held by PDI, then PDI will pay the penalty and interest as a result of
this error. Client understands that PDI will not be responsible for penalties or interest due to missing, inaccurate, or
incomplete information. Client also understands that PDI is not responsible for taxes with respect to wages paid prior to the
first live payroll processed by PDI. PDI does not assume liability for the improper payment of taxes or filing of returns due to
incorrect tax identification numbers, improper State tax registration, incorrect unemployment rates or incorrect social
security numbers. Client authorizes PDI to prepare, sign and file with the appropriate taxing authorities all returns for
payroll taxes on an ongoing basis.
This agreement shall be governed by the State of Colorado. It constitutes the entire agreement between the parties and
supersedes any prior agreement. PDI may amend this Agreement from time to time upon written notice (email shall
constitute as written notice) to the Client.
Client represents that:
 Funds will be made available for taxes, invoice and employee credits when we collect them – one business day prior to
payday. ____ (initial)
 Please list your Authorized Payroll Contacts (full name and position) in addition to yourself. The below individuals are
authorized to provide and receive confidential payroll related information. Please communicate any changes to this list
in writing to PDI.
_____________________________________________, _____________________________________________,
_____________________________________________, _____________________________________________.
Page 1 of 5
Because of the work and responsibility that this entails for our company, it is very important that the funds be available
from your company when we go to collect them. An NSF will require a certified check or Wire within 24 hours from the time
we receive the NSF notice. In addition we will assess a fee of $75 the first time, $150 the second time with the third time a
final fee of $200 and we’ll revert to you having the responsibility of paying the taxes directly to the agencies involved.
____ (initial)
We want this to proceed smoothly for you. You will receive copies of the returns we file on your behalf. Any adjustments in
taxes will occur at quarter end or with the next payroll depending on the situation. Extra payrolls or missed payroll are
critical to communicate to us prior to their scheduled time and may incur additional fees. If there are no payrolls run during
a calendar quarter, PDI will charge a quarterly processing fee for processing zero returns.
By signing this letter and the forms attached you agree to the terms above. Either party may terminate this agreement with
30 days written notice.
Signature
Date:___________________________
Print Name and Title:
/
Company:
************************(FOR INTERNAL USE ONLY)*******************************************
Accepted By: The Payroll Department, Inc. (PDI)
Signature
Page 2 of 5
Date:
Full Name: BRYAN DEAR (owner)
PAYROLL SERVICES ELECTRONIC FUNDS TRANSFER (EFT) AGREEMENT
Including employee direct deposits
This agreement is between THE PAYROLL DEPARTMENT, INC (“PDI”) and the company identified as “Client” below on this
Agreement. Terms not otherwise defined in this Agreement shall have the definition ascribed to those terms in the NACHA
Operating Rules (“Rules”). Client hereby authorizes PDI to process ACH transactions on behalf of Client. This Agreement
authorizes PDI to process both debit and credit transactions for Client for the purpose of paying employees, paying vendors
(including PDI), paying tax liabilities and paying any other transactions transmitted by PDI. Client agrees that all ACH direct
debit transactions will be submitted to PDI no later than 11:00 AM two (2) banking days prior to Settlement Date. Client
agrees that payroll will not be funded directly by a foreign bank account.
Client acknowledges and agrees that Client is the Originator of the ACH Entries and Client agrees to assume the
responsibilities of an Originator under the Rules. Client agrees to comply with and be subject to the Rules in existence at
the date of this Agreement, and any amendments to these Rules made from time to time. It shall be the responsibility of
the Client that the origination of ACH transactions complies with U.S. law, including but not limited to sanctions enforced by
the Office of Foreign Assets Control (“OFAC”). It shall further be the responsibility of the Client to obtain information
regarding such OFAC enforced sanctions. PDI shall notify Client by phone or electronic transmission of receipt of each
return Entry no later than one Business Day after the Business Day of receiving such notification from the ACH Processor.
Client shall obtain an authorization (“Authorization Agreement”) as required by the Rules from the person or entity whose
account will be debited or credited as the result of a debit or credit Entry initiated by Client and Client shall retain the
Authorization Agreement in original form while it is in effect and the original or a copy of each authorization for two (2)
years after termination or revocation of such authorization as stated in the Rules. Upon request, Client shall furnish the
original or a copy of the authorization to any affected Participating Depository Financial Institution, as defined in the Rules.
Client acknowledges that the Authorization Agreement has not been terminated, in whole or in part, or by operation of law.
Client agrees to establish and/or maintain a defined checking account or accounts for the purpose of funding any and all
transactions processed by PDI. Client agrees that funds will be maintained within the accounts sufficient to cover Client’s
total payroll costs including but not limited to net payroll, tax liabilities, vendor payments (including PDI) and all other
transactions considered a part of client’s payroll processes. Client hereby authorizes PDI to initiate an ACH Debit Entry to
Client’s account to transfer funds to PDI sufficient to fund the total amount of the ACH Entries Originated by Client. Should
Client have insufficient funds available to provide funding of all transactions, PDI will notify Client of the deficiency and
within twenty-four hours following notification, Client agrees to wire transfer funds to PDI sufficient to provide total
funding of all transactions. If following reversal transactions funds are not totally recovered by PDI, Client, its officers and
directors, and any owner or owners agree to be held personally liable for non-recovered funds and such officers, directors
and any owner.
Instances of insufficient funds will be assessed the following fees and actions listed below:
 First instance - an insufficient funds (NSF) fee will be assessed in the amount of $75.
 Second instance - an NSF fee will be assessed in the amount of $150. PDI, in its sole discretion, may elect to not
process further ACH transactions for Client.
 Third instance – an NSF fee will be assessed in the amount of $200. Client will be required to prefund further ACH
transaction amounts either by wire or reverse wire (draw down) prior to Client’s ACH transaction being
transmitted.

____ (initial)
Page 3 of 5
The Client shall defend, indemnify, and hold harmless PDI, and its officers, directors, agents, and employees, from and
against any and all actions, costs, claims, losses, damages, or expenses, including attorney's fees and expenses, resulting
from or arising out of any breach of any of the agreements, representations or warranties of the Client contained in this
Agreement; or (bb) any act or omission of the Client or any other person acting on the Client's behalf.
PDI has the right to audit for compliance of the rules governing ACH transactions and for compliance of the rules governing
this Agreement. PDI may terminate this agreement if there is any doubt in PDI’s sole opinion that Client is out of
compliance with either this Agreement or the Rules governing ACH transactions.
PDI may amend this Agreement from time to time upon written notice (email shall constitute as written notice) to the
Client. In the event that performance of Services under this Agreement would result in a violation of any present or future
statute, regulation or governmental policy to which PDI is subject, then this Agreement shall be amended to the extent
necessary to comply with such statute, regulation or policy. PDI shall have no liability to the Client as a result of any such
violation, amendment or termination. Any practices or course of dealings between PDI and Client, or any procedures or
operational alterations used by them, shall not constitute a modification of this Agreement or the Rules, nor shall they be
construed as an amendment to this Agreement or the Rules.
This Agreement shall become effective upon acceptance by PDI and will remain in effect, unless cancelled or terminated by
either party upon 30-days prior written notice. Either party may terminate this Agreement if the other party is in material
breach of this Agreement ten (10) days after receiving notice of such breach. Client’s failure to fully pay any fees due within
ten (10) days after the applicable due date shall be deemed a material breach. Upon termination, all rights and obligations
hereunder will cease, except that Client’s obligation to provide indemnification with respect to Client’s participation in the
Service prior to the effective date of termination will survive. Client will not be entitled to a refund of any fees paid by Client
in connection with the Service prior to termination. Notwithstanding the foregoing, PDI may immediately terminate this
Agreement without notice if, in PDI’s sole discretion, PDI determines that Client has abused the Service, is in violation of any
law, regulation or Rules, or PDI believes that it will suffer a loss or other damage if the Agreement is not terminated. PDI’s
election to terminate this Agreement is in addition to any and all other remedies that may be available to PDI and will not
affect any obligations Client may have to PDI. Any reinstatement of the Service under this Agreement will be at PDI’s sole
discretion and must be agreed upon in writing by an authorized representative of PDI.
PDI SHALL BE LIABLE FOR CLIENT'S ACTUAL DAMAGES DUE TO CLAIMS OF GROSS NEGLIGENCE ARISING
SOLELY FROM PDI'S OBLIGATIONS TO CLIENT WITH RESPECT TO ENTRIES TRANSMITTED PURSUANT TO
THIS AGREEMENT. IN NO EVENT SHALL PDI BE LIABLE FOR ANY CONSEQUENTIAL, SPECIAL,
INCIDENTAL, PUNITIVE OR INDIRECT LOSS OR DAMAGE WHICH CLIENT MAY INCUR OR SUFFER IN
CONNECTION WITH THIS AGREEMENT,
This Agreement is the complete and exclusive statement of the agreement between PDI and the Client with respect to the
subject matter hereof and supersedes any prior agreement(s) between PDI with respect to such subject matter. In the
event performance of the services provided herein in accordance with the terms of this Agreement would result in a
violation of any present or future statute, regulation or government policy to which PDI is subject, and which governs or
affects the transactions contemplated by this Agreement, then this Agreement shall be deemed amended to the extent
necessary to comply with such statute, regulation or policy, and PDI shall incur no liability to the Client as a result of such
violation or amendment. No course of dealing between PDI and the Client will constitute a modification of this Agreement,
the Rules, or the security procedures, or constitute an agreement between PDI and the Client regardless of whatever
practices and procedures PDI and the Client may use. ____ (initial)
Page 4 of 5
The laws of the State of Colorado govern the terms and conditions above. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof shall be settled by arbitration administrated by the American Arbitration
Association in accordance with its commercial Arbitration Rules (including the Emergency Interim Relief Procedures) and
judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.
Signature
Date:___________________________
Print Name and Title:
/
Company:
************************(FOR INTERNAL USE ONLY)*******************************************
Accepted By: The Payroll Department, Inc. (PDI)
Signature
Page 5 of 5
Date:
Full Name: BRYAN DEAR (owner)