I would suggest using a payroll service if you hire your first employee. For prices that range from $20 to $80 a month (depending on what you want them to do), you get the peace of mind in knowing that you are doing all the correct things when it comes to withholding taxes, paying them on time, filing the correct paperwork with the federal government and states, and complying with the ever changing employment compensation laws.
I look at it this way - what would it cost me in time to do this each month -even with the help of a bookkeeper? One of my best customers is a CPA - and he recommends outsourcing to a service for the reasons above.
Some options - Intuit has a service tied to the Quickbooks line, ADP has an "express" service for small business.