What I do.
First you have to get a EIN number. Employer Identification Number. You will have to do this if you are to have legal employees.
I pay me employee weekly on the last work day of the week. I go to http://www.paycheckcity.com/
and use the hourly payroll calculator to figure out the withholdings etc. I staple the print out of this that looks like two check stubs to my employee's time sheet he filled out.
My employee has a checking account at my bank. This allows me to transfer the money electronically to him. I have a record of the payment going to his account because the bank maintains my statement. I then have a seperate account which I transfer money to to cover his withholdings as well as my portion. This way when quarterly taxes are due I simply write a check from that account which is fully funded.