UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 11-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from ____________ to
_______________
 Commission file number 0-11330
 Paychex, Inc. 401(k)

Incentive Retirement Plan
  Paychex, Inc.
911 Panorama Trail South
Rochester, NY 14625




---



##### 



Index to Financial Statements, Schedule and Exhibits
 Financial Statements
    
    Page No.Report of Independent Registered Public Accounting Firm
    
    
    3Statement of Net Assets Available for Benefits
December 31, 2010 and 2009
    
    
    4Statement of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 2010 and 2009
    
    
    5Notes to Financial Statements
    
    
    6ScheduleSchedule H, Line 4i  Schedule of Assets (Held at End of Year)
    
    
    16Exhibits23  Consent of Independent Registered Public Accounting Firm
    
    
    17
 SIGNATURES
 The Plan.
  
 /s/  Jacob W. Flaitz, Jr.Jacob W. Flaitz, Jr.401(k) Plan Administrator 2




---



##### 



Report of Independent Registered Public Accounting Firm
 
     /s/ Ernst & Young LLP 
 3




---



##### 



PAYCHEX, INC. 401(k) INCENTIVE RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
 December 31,2010
    
    
    2009AssetsCash
    
    $
    2,182
    
    
    $
    3,450Investments (at fair value):Paychex ESOP Stock Fund
    
    
    119,522
    
    
    
    123,124American Funds EuroPacific Growth Fund
    
    
    43,145
    
    
    
    41,192American Funds Growth Fund of America
    
    
    43,812
    
    
    
    42,194ClearCourse Group Variable Annuity
    
    
    8,294
    
    
    
    5,848Columbia Short Term Bond Fund
    
    
    8,630
    
    
    
    9,092Dreyfus Mid Cap Index Fund
    
    
    14,363
    
    
    
    7,612Dreyfus Small Cap Stock Index Fund
    
    
    7,624
    
    
    
    3,696Fidelity Balanced Fund
    
    
    0
    
    
    
    29,248Fidelity Balanced Fund K
    
    
    31,879
    
    
    
    0Fidelity Freedom Funds 2005 - 2050
    
    
    0
    
    
    
    39,886Fidelity Freedom K Funds 2005 - 2050
    
    
    50,945
    
    
    
    0Fidelity Freedom Income Fund
    
    
    0
    
    
    
    1,956Fidelity Freedom K Income Fund
    
    
    1,594
    
    
    
    0Fidelity U.S. Bond Index Fund
    
    
    33,828
    
    
    
    32,057Fidelity U.S. Government Reserve Fund
    
    
    40,718
    
    
    
    43,179Invesco Van Kampen Growth and Income Fund
    
    
    22,137
    
    
    
    21,092Oppenheimer Main Street Small Cap Fund
    
    
    0
    
    
    
    21,180Spartan International Index Fund
    
    
    9,464
    
    
    
    8,309Spartan Total Market Index Fund
    
    
    10,926
    
    
    
    4,805Spartan 500 Index Fund
    
    
    26,957
    
    
    
    23,741T. Rowe
Price Small-Cap Value Fund Advisor
    
    
    24,051
    
    
    
    0Victory Special Value Fund
    
    
    0
    
    
    
    23,196Wells Fargo Advantage Common Stock Fund
    
    
    25,652
    
    
    
    0Total investments
    
    
    523,541
    
    
    
    481,407Contributions receivable:Participant
    
    
    623
    
    
    
    518Employer
    
    
    143
    
    
    
    0Total contributions receivable
    
    
    766
    
    
    
    518Notes receivable from participants
    
    
    16,320
    
    
    
    14,458Net assets available for benefits
    
    $
    542,809
    
    
    $
    499,833
  4




---



##### 



PAYCHEX, INC. 401(k) INCENTIVE RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
 Year Ended December 31,2010
    
    
    2009Contributions:Participant
    
    $
    36,446
    
    
    $
    36,852Employer, net of forfeitures
    
    
    143
    
    
    
    4,126Total contributions
    
    
    36,589
    
    
    
    40,978Investment income:Dividend and interest income
    
    
    11,360
    
    
    
    10,464Net realized and unrealized appreciation in fair
value of investments
    
    
    37,244
    
    
    
    77,969Total investment income
    
    
    48,604
    
    
    
    88,433Interest
income on notes receivable from participants
    
    
    787
    
    
    
    858Benefits paid to participants
    
    
    (43,004
    )
    
    
    (25,886
    )Change in net assets available for benefits
    
    
    42,976
    
    
    
    104,383Net assets available for benefits at beginning of year
    
    
    499,833
    
    
    
    395,450Net assets available for benefits at end of year
    
    $
    542,809
    
    
    $
    499,833
  5




---



##### 



PAYCHEX, INC. 401(k) INCENTIVE RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 and 2009
 NOTE A. PLAN DESCRIPTION
  General :
   Plan Amendments:
 Plan Administration:
 Eligible Employees:
 6




---



##### 



NOTE A. PLAN DESCRIPTION (continued)
 Contributions:
   Vesting:
 Participant Accounts:
 7




---



##### 



NOTE A. PLAN DESCRIPTION (continued)
 Investment Options:
 
    
    Paychex ESOP Stock Fund
    
    American Funds EuroPacific Growth Fund
    
    American Funds Growth Fund of America
    
    ClearCourse Group Variable Annuity
    
    Columbia Short Term Bond Fund
    
    Dreyfus Mid Cap Index Fund
    
    Dreyfus Small Cap Stock Index Fund
    
    Fidelity Balanced Fund K
    
    Fidelity Freedom K Funds 2005 - 2050
    
    Fidelity Freedom K Income Fund
    
    Fidelity U.S. Bond Index Fund
    
    Fidelity U.S. Government Reserve Fund
    
    Invesco Van Kampen Growth and Income Fund
    
    Spartan International Index Fund
    
    Spartan Total Market Index Fund
    
    Spartan 500 Index Fund
    
    T. Rowe Price Small-Cap Value Fund Advisor
    
    Wells Fargo Advantage Common Stock Fund
  Forfeited Accounts:
 Participant Loans:
 8




---



##### 



NOTE A. PLAN DESCRIPTION (continued)
 Withdrawals: 1 2
 Payment of Benefits: 1 2
  Voting and Tender Offer Rights on ESOP Stock:
 Plan Termination:
 NOTE B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Accounting:
 Use of Estimates:
 9




---



##### 



NOTE B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Investment Valuation and Income Recognition:
  Contributions:
 Notes
Receivable from Participants
 Payment of Benefits:
 Recently Adopted Accounting Pronouncements :
 
    
    Guidance aimed at improving disclosures about fair value measurements, which adds new
disclosure requirements for transfers into and out of fair value hierarchy Levels 1 and 2
and separate disclosures about purchases, sales, issuances, and settlements relating to
Level 3 measurements. It also clarifies existing disclosure requirements regarding the
level of disaggregation for classes of assets and liabilities, and about inputs and
valuation techniques used to measure fair value;
    
    Guidance that requires participant loans to be classified as notes receivable from
participants, which are segregated from plan investments and measured at their unpaid
principal balance plus any accrued but unpaid interest. The Plans financial statements and
accompanying notes reflect this reclassification.
 Recently Issued Accounting Pronouncements:
 10




---



##### 



NOTE C. INVESTMENTS
  December 31,In thousands
    
    2010
    
    
    2009Paychex ESOP Stock Fund
    
    $
    119,522
    
    
    $
    123,124American Funds EuroPacific Growth Fund
    
    $
    43,145
    
    
    $
    41,192American Funds Growth Fund of America
    
    $
    43,812
    
    
    $
    42,194Fidelity Balanced Fund
    
    $
    0
    
    
    $
    29,248Fidelity Balanced Fund K
    
    $
    31,879
    
    
    $
    0Fidelity Freedom Funds 2005 - 2020
    
    $
    0
    
    
    $
    39,886Fidelity Freedom Funds K 2005 - 2050
    
    $
    50,945
    
    
    $
    0Fidelity U.S. Bond Index Fund
    
    $
    33,828
    
    
    $
    32,057Fidelity U.S. Government Reserve Fund
    
    $
    40,718
    
    
    $
    43,179
 11




---



##### 



NOTE C. INVESTMENTS (continued)
  Year EndedDecember 31,In thousands
    
    2010
    
    
    2009Paychex ESOP Stock Fund
    
    $
    1,168
    
    
    $
    17,956American Funds EuroPacific Growth Fund
    
    
    3,128
    
    
    
    9,956American Funds Growth Fund of America
    
    
    4,475
    
    
    
    10,105ClearCourse Group Variable Annuity
    
    
    608
    
    
    
    927Columbia Short Term Bond Fund
    
    
    51
    
    
    
    444Dreyfus Mid Cap Index Fund
    
    
    2,277
    
    
    
    1,600Dreyfus Small Cap Stock Index Fund
    
    
    1,159
    
    
    
    774Fidelity Balanced Fund
    
    
    388
    
    
    
    5,594Fidelity Balanced Fund K
    
    
    2,843
    
    
    
    0Fidelity Freedom Funds 2005 - 2050
    
    
    (539
    )
    
    
    7,574Fidelity Freedom K Funds 2005 - 2050
    
    
    5,365
    
    
    
    0Fidelity Freedom Income Fund
    
    
    28
    
    
    
    191Fidelity Freedom K Income Fund
    
    
    77
    
    
    
    0Fidelity U.S. Bond Index Fund
    
    
    756
    
    
    
    788Invesco Van Kampen Growth and Income Fund
    
    
    2,333
    
    
    
    3,777Oppenheimer Main Street Small Cap Fund
    
    
    3,524
    
    
    
    5,467Spartan International Index Fund
    
    
    404
    
    
    
    1,497Spartan Total Market Index Fund
    
    
    1,157
    
    
    
    1,046Spartan 500 Index Fund
    
    
    3,041
    
    
    
    4,643T. Rowe
Price Small-Cap Value Fund Advisor
    
    
    745
    
    
    
    0Victory Special Value Fund
    
    
    3,287
    
    
    
    5,630Wells Fargo Advantage Common Stock Fund
    
    
    969
    
    
    
    0Net realized and unrealized appreciation
in fair value of investments
    
    $
    37,244
    
    
    $
    77,969
 12




---



##### 



NOTE D. FAIR VALUE MEASUREMENTS
   
    
    Level 1 valuations are based on quoted prices in active markets for identical
instruments that the Plan has the ability to access.
    
    Level 2 valuations are based on quoted prices for similar, but not identical,
instruments in active markets; quoted prices for identical or similar instruments in
markets that are not active; or other significant observable inputs besides quoted prices.
    
    Level 3 valuations are based on information that is unobservable and significant to the
overall fair value measurement.
   December 31, 2010Quoted
    
    
    Significantprices in
    
    
    other
    
    
    SignificantCarrying
    
    
    active
    
    
    observable
    
    
    unobservableValue
    
    
    markets
    
    
    inputs
    
    
    inputsIn thousands
    
    (Fair value)
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Mutual Funds
    
    $
    395,725
    
    
    $
    395,725
    
    
    $
    
    
    
    $
    Paychex Common Stock
    
    $
    119,522
    
    
    $
    119,522
    
    
    $
    
    
    
    $
    Annuity Fund
    
    $
    8,294
    
    
    $
    
    
    
    $
    8,294
    
    
    $
    
 13




---



##### 



NOTE D. FAIR VALUE MEASUREMENTS (continued)
  December 31, 2009Quoted
    
    
    Significantprices in
    
    
    other
    
    
    SignificantCarrying
    
    
    active
    
    
    observable
    
    
    unobservableValue
    
    
    markets
    
    
    inputs
    
    
    inputsIn thousands
    
    (Fair value)
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Mutual Funds
    
    $
    352,435
    
    
    $
    352,435
    
    
    $
    
    
    
    $
    Paychex Common Stock
    
    $
    123,124
    
    
    $
    123,124
    
    
    $
    
    
    
    $
    Annuity Fund
    
    $
    5,848
    
    
    $
    
    
    
    $
    5,848
    
    
    $
    
 NOTE E. RISKS AND UNCERTAINTIES
   NOTE F. RELATED PARTY TRANSACTIONS
   14




---



##### 



NOTE G. TAX STATUS
   NOTE H. RECONCILIATION OF FINANCIAL STATEMENTS TO IRS FORM 5500
  December 31,In thousands
    
    2010
    
    
    2009Net assets available for benefits  financial statements
    
    $
    542,809
    
    
    $
    499,833Less: participant and employer contributions receivable
    
    
    766
    
    
    
    518Less: deemed distributions   defaulted loans
    
    
    34
    
    
    
    0Net assets available for benefits  IRS Form 5500
    
    $
    542,009
    
    
    $
    499,315
 15




---



##### 



SCHEDULE OF ASSETS (HELD AT END OF YEAR)
(SCHEDULE H, LINE 4i FORM 5500)
 PAYCHEX, INC. 401(k) INCENTIVE RETIREMENT PLAN
EIN-16-1124166
PLAN-0-40436
 DECEMBER 31, 2010
 Identity of
    
    
    Description of Investment Including MaturityParty
    
    
    Date, Rate of Interest, Collateral, Par or
    
    Units/
    
    
    CurrentInvolved
    
    
    Maturity Value
    
    Shares
    
    
    ValueFidelity*
    
    Cash
    
    
    0
    
    
    $
    2,182Fidelity*
    
    Paychex, Inc. Common Stock
    
    
    3,867
    
    
    
    119,522Fidelity*
    
    American Funds EuroPacific Growth Fund
    
    
    1,061
    
    
    
    43,145Fidelity*
    
    American Funds Growth Fund of America
    
    
    1,451
    
    
    
    43,812Fidelity*
    
    ClearCourse Group Variable Annuity
    
    
    833
    
    
    
    8,294Fidelity*
    
    Columbia Short Term Bond Fund
    
    
    869
    
    
    
    8,630Fidelity*
    
    Dreyfus Mid Cap Index Fund
    
    
    515
    
    
    
    14,363Fidelity*
    
    Dreyfus Small Cap Stock Index Fund
    
    
    373
    
    
    
    7,624Fidelity*
    
    Fidelity Balanced Fund K
    
    
    1,749
    
    
    
    31,879Fidelity*
    
    Fidelity Freedom K Funds 2005 - 2050
    
    
    3,771
    
    
    
    50,945Fidelity*
    
    Fidelity Freedom K Income Fund
    
    
    139
    
    
    
    1,594Fidelity*
    
    Fidelity U.S. Bond Index Fund
    
    
    2,986
    
    
    
    33,828Fidelity*
    
    Fidelity U.S. Government Reserve Fund
    
    
    40,718
    
    
    
    40,718Fidelity*
    
    Invesco Van Kampen Growth and Income Fund
    
    
    1,152
    
    
    
    22,137Fidelity*
    
    Spartan International Index Fund
    
    
    269
    
    
    
    9,464Fidelity*
    
    Spartan Total Market Index Fund
    
    
    300
    
    
    
    10,926Fidelity*
    
    Spartan 500 Index Fund
    
    
    606
    
    
    
    26,957Fidelity*
    
    T. Rowe
Price Small-Cap Value Fund Advisor
    
    
    670
    
    
    
    24,051Fidelity*
    
    Wells Fargo Advantage Common Stock Fund
    
    
    1,241
    
    
    
    25,652Participants *
    
    Participant loans **
    
    
    0
    
    
    
    16,320$
    542,043
 
 *
    
    Represents party-in-interest**
    
    Loans to participants have various maturity dates (interest at 4.25% to 9.25%). 16