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How much does a PEO Cost?

4 min read

When investing in your business, you always want to be sure the risk is worth the reward. At, we can assure you that partnering with a professional employer organization, or PEO, is a risk worth taking. 

Teaming up with a PEO is a proven strategy to take your business to the next level. With comprehensive HR solutions and the ability to unlock your company’s true potential, an experienced PEO is well worth the financial investment. If you’re considering outsourcing your HR needs to a PEO, let us help you break down the costs. Read below for the answer to the burning question: How much does a PEO Cost?

What is the Cost of a PEO?

The cost of a PEO differs from business to business, as fees will depend on the number of employees you have and the services you want to use. For example, you’ll pay a lower rate if your business only requires essential services like payroll and benefits administration. However, if you need more advanced services, such as one-on-one attention from HR experts, you’ll have to pay a little extra. 

Generally, a PEO can cost 2-12% of employee wages. However, when considering the time and money needed to administer HR independently, the upfront costs of PEO don’t seem so bad. When it comes to pricing, a PEO will charge you either an employee-based fee or a payroll-based fee. Employee-based prices are based on the number of your employees. Paying with this method is an excellent option if your employees’ pay partially depends on variables like commission. Meanwhile, a payroll-based fee is a good fit for businesses with stable month-to-month payrolls. With this form of payment, a PEO will calculate your cost based on a percentage of your annual payroll. 

What Are You Paying For?  

Now that you know how much a PEO costs, you’re probably wondering, What exactly will I be paying for? PEOs offer a variety of valuable HR services to take your business to new heights. Read below for a comprehensive list of a PEO’s HR solutions. 

HR Administration

A PEO’s primary focus will be administering HR solutions for your business. From employee onboarding and employee relations to performance management and recruiting, a PEO will provide essential HR services to help your business thrive. 

Payroll Administration

Payroll is essential to any business but can be challenging to manage. With a PEO, you can hand off payroll responsibilities without thinking twice. A PEO will take care of payroll processing, tax calculations, and employee paycheck distribution. 

Employee Benefits

PEOs offer a considerable advantage when it comes to employee benefits. Granting you access to some of the best benefits plans on the market, a PEO will secure your employee comprehensive health insurance, retirement plans, and other perks that will have them sticking around for the long haul. 

Compliance Management

Understanding employment laws and regulations is vital for any growing business. However, these regulations can be confusing for someone with limited legal knowledge or HR expertise. By partnering with a PEO, you can receive comprehensive compliance management services to ensure your business follows federal, state, and local laws. 

Risk Management

A PEO can be a helpful tool for ensuring workplace safety, worker’s compensation insurance, and addressing other risk management issues. These offerings can be especially helpful for industries with a high risk of work-related accidents, such as construction or manufacturing. 

How Can a PEO Save You Money in the Long Run? 

A PEO is a well-worth investment for businesses looking to expand their revenue and grow to new heights. As of 2019, the annual return on investment in cost savings alone from using a PEO is 27.2%, according to the National Association of Professional Employer Organizations. Most of these cost savings per employee stemmed from internal HR salaries and benefits and health benefits costs, yielding a total average cost savings of $1,775 per full-time employee. 

Of the numerous advantages a PEO can offer your business, cost and time savings make the most significant difference. By streamlining your HR processes, a PEO can help your business work more efficiently to meet your milestones. 

Simplify Your Business with 

At, we make it easier to find the perfect PEO provider for your business. With access to some of the largest PEOs in the country, our agents provide high-performing options that will unlock your business’s true potential. If you’re ready to take your business to new heights, connect with our team today to shop PEO quotes and receive competitive pricing within 24-72 hours! 

Ready to take your business to the next level?

Contact us today to learn more about how we can help you achieve your goals.

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