Funds are transferred from the bank account the payroll checks are set up to come out of - IE, the employer's bank account.  Then they are deposited into each employees bank account that you have entered in their employee screen.  Obviously you will need to collect their banking info on some type of direct deposit authorization form.  I would HIGHLY suggest they provide you a voided copy of their check or a preprinted direct deposit authorization form from their bank with their banking information preprinted on it.  This will help avoid errors entering wrong bank info.  You would be surprised how many empployees we've had write down the wrong information.

As for payroll taxes - we pay those thru EFTPS and the various state & local agencies, we don't use EasyACCT to process those.  I don't even know if EasyACCT has that function or not - haven't looked into it as we have never had the need to use that type of function.