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Frequently Asked Questions

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What is the total cost of working with a PEO?

The total cost of working with a Professional Employer Organization (PEO) depends on various factors such as the size of your business, the level of service you require, and the specific needs of your company. Typically, a PEO charges an administrative fee based on the number of employees the organization has. This is commonly known as per employee, per month, or PEPM. This fee includes a range of services such as HR management, employee benefits administration, and workers’ compensation insurance.

Additionally, PEOs may charge a one-time setup fee, which can vary depending on the complexity of your business’s needs. Some PEOs also charge additional fees for specific services such as recruitment or employee training. It’s important to carefully review and understand the fees and services included in a PEO’s contract before signing up for their services.

How can I uncover a PEO’s pricing structure?

Finding the true pricing for a PEO can be a daunting task, as different providers have varying fee structures and may include different services in their packages. To gain a better understanding, it’s important to ask specific questions about what is included in their administrative fees and what services are considered add-ons.

Start by asking for a breakdown of their administrative fees and what services are included. Additionally, ask about any additional fees for services that may be outside of the standard package. Be sure to clarify what services are considered “optional” and which ones are required.

Can working with a PEO really save my business money?

Yes, working with a PEO can potentially save your business money in several ways. By partnering with a PEO, you can outsource various HR management and employee benefits administration tasks, which can save you time and money compared to hiring and training an in-house HR team.

PEOs can also leverage their purchasing power to negotiate better rates for employee benefits and workers’ compensation insurance, which can result in significant cost savings for your business. Moreover, PEOs can help ensure that your business is compliant with various labor laws and regulations, which can help you avoid costly penalties and legal issues.

Why is a PEO less expensive than going directly to an insurance company for employee benefits?

A PEO can be less expensive than going directly to an insurance company for employee benefits for a few reasons. One of the main reasons is that a PEO has the ability to pool together multiple companies’ workers and offer them benefits at a lower cost due to the economy of scale. This means that the PEO can negotiate better rates with insurance providers and offer a wider range of benefits to their clients at a lower cost.

PEOs also take on many of the administrative tasks associated with offering employee benefits, such as enrollment, billing, and compliance. By streamlining these processes, a PEO can provide their services at a lower cost than if each individual company were to handle these tasks on its own.

It’s important to note that your savings can vary depending on the size of your company and the specific benefits you’re interested in offering. It’s best to do your research and compare the costs and benefits of different options before making a decision.  

What is a professional employer organization?

A PEO (Professional Employer Organization) is a company that provides comprehensive HR (human resources) services to businesses. By outsourcing HR functions to a PEO, companies can free up valuable time and resources to focus on their core operations. PEOs typically offer a range of services, including payroll processing, employee benefits administration, HR compliance, and risk management.

PEOs work by co-employing a client’s workforce. This means that the PEO becomes the employer of record for tax and insurance purposes while the client retains control over day-to-day operations and decision-making. By partnering with a PEO, businesses can access a wide range of HR services that they might not otherwise have the resources or expertise to manage in-house. PEOs also help businesses stay compliant with employment laws and regulations, reducing the risk of costly penalties and legal issues.

Why do business owners use PEO services?

Business owners utilize PEO services for a variety of reasons. One of the main reasons is to reduce their administrative burden and save time. A PEO can handle many of the HR tasks that businesses would otherwise have to manage on their own, such as payroll processing, tax filing, and benefits administration. This allows business owners to focus on their growth, core objectives, and goal achievement. PEOs can also offer group rates for insurance and other benefits, which are often more affordable than individual policies. Access to a wide range of robust benefits packages serves to attract and retain talent, which helps companies remain competitive.