March 25 (Reuters) - Payroll firm Paychex ( PAYX ) beat

third-quarter earnings estimates on Wednesday, helped by strong

demand for its payroll and human resources services, despite

small-business clients being cautious on spending.

Shares of the Rochester, New York-based company, which have

fallen more than 19% this year, rose nearly 3% in premarket

trading following the results.

Increasing state-level compliance requirements for paid

leave, retirement mandates and transparency in wage reporting

have made in-house payroll increasingly risky for small firms,

boosting demand for Paychex's ( PAYX ) services.

Paychex ( PAYX ) provides payroll processing, HR and benefits

administration primarily for small- and medium-sized businesses.

The company's revenue rose 20% to $1.81 billion in the third

quarter from a year ago, beating analysts' average estimate of

$1.79 billion, according to data compiled by LSEG.

Adjusted profit came in at $1.71 per share for the three

months ended February 28, compared with estimates of $1.67

apiece.

Management solutions, Paychex's ( PAYX ) largest segment, reported a

23% rise in quarterly revenue, helped by an increased number of

clients and higher revenue per client on the back ofcloud-based

payroll firm Paycor's customer base.

Paychex ( PAYX ) acquired Paycor for about $4.1 billion in cash last

year, adding to its product portfolio Paycor's software that

automates routine tasks and reduces compliance risk.

Paychex ( PAYX ) on Wednesday raised its annual forecast for interest

on funds held for clients, which is the interest the company

earns by investing client payroll and tax funds before they are

paid out to employees or tax authorities.

It expects the interest to be between $200 million and $210

million, up from its previous forecast range of $190 million to

$200 million.