When you engage a PEO, you enter into a co-employment relationship. This arrangement allows your PEO to handle administrative tasks such as HR management, payroll processing, and benefits administration on your behalf. That includes withholding and remitting payroll taxes, handling workers’ compensation claims, and more.

A common myth is that business owners lose control when they engage a PEO. That is incorrect. You are still responsible for managing your employees, handling operations, and making all business decisions. Rather than spending valuable hours on HR, however, you’ll gain more time to focus on your core business and strategic growth initiatives.

The cost of a PEO will vary depending on the size of your business, your location, services needed, and your industry. For a customized quote, schedule a consultation with our business advisors.

In general, though, PEOs typically charge for their services in one of two ways:

• As a percentage of total payroll (typically between 3-8 percent)
• As a flat per-employee-per-year (PEPY) fee.

Additional fees—such as administrative, implementation, or optional services fees—may also be included in the overall cost of a PEO, so it’s important to review your agreement carefully.

Businesses of all sizes—from five employees to 500 or more—can benefit from the wide range of HR-related solutions that PEOs offer. Rather than asking if your company is too big or small, consider asking, “Can a PEO help me address my HR needs and challenges?”

Here are some common reasons businesses of various sizes choose a PEO:

• Access to medical plans, retirement plans, and ancillary benefits at more affordable rates.
• Desire to offload time-consuming HR administrative tasks and focus on growth and core business functions.
• Help navigating the complex regulatory compliance landscape and avoiding costly fines and penalties.
• Access to integrated HR technology that helps streamline tasks and improve efficiencies.
• Improve ability to attract, find, and retain top talent.
• Help creating a safer, more compliant workplace.

A professional employer organization handles back-office administration for small and mid-sized businesses that lack the time, resources, or expertise to manage HR on their own. HR solutions that many PEOs provide include:

• HR management
• Payroll administration, including payroll-related taxes
• Benefits procurement and administration
• Employment-related compliance guidance
• Risk management and safety services, including workers’ compensation and claims assistance
• HR technology
• Recruiting services
• Performance management
• Employee training and development

When you partner with a PEO, your company continues to make all business decisions, manage operations, supervise employees, handle reviews and job assignments, determine salaries and hourly wage rates, choose which employee benefits to offer, and make all personnel decisions.