Best PEO Companies in 2020

PEO stands for Professional Employer Organization. They typically offer a range of administrative services to small and medium-sized businesses (SMBs). These services can include but are not limited to various types of insurance, human resources, payroll processing, risk mitigation, retirement services, compliance, and training.

In this article, we will examine various aspects that make up the PEO sector and review a list of PEO companies.

 Specifically, we will:

  • Detail our review methodology
  • Review our top 10 best PEO companies
  • Outline the benefits of a PEO company

SHOW MORE

Best Professional Employer Organizations in 2020

1. JustWorks

Seamless 401(k) contributions

Fully automated, plug-n-play payroll

Tech-first approach

Best for businesses looking for a hands-off management of payroll, benefits, and HR

Visit Site

show less


Justworks is an SMB-focused PEO company, payroll, HR services, and benefits administration provider. The company best serves small-to-medium size tech and finance startups looking for quick and easy online services. Justworks is a US-based company with Employer Services Assurance Corporation (ESAC) accreditation and Service Organization Control (SOC) 1 and SOC 2 compliance.

Read full review

Services

Pricing

Ease of Use

Support

2. ADP TotalSource

Additional legal support

70 years of experience in payroll

Excellent employee health benefits

best PEO for risk management on account of its additional legal support

Visit Site

show less


ADP TotalSource is a complete payroll and HR services solution for small and large companies around the world. It provides all the necessary payroll, HR, and benefits in a basic package plus the option of additional add-on services like 401(k) management, applicant tracking, and workforce management. ADP TotalSource is accredited by the BBB, IRS, and ESAC and offers improved risk-reduction through its legal defense.

Read full review

Services

Pricing

Ease of Use

Support

3. Paychex

Cloud-based HR technology with 24/7 remote access for employees and admin

Dedicated HR consultants

All-in-one payroll and HR dashboard

the best PEO for large businesses that operate multiple offices between Europe and the US

Visit Site

show less


Paychex Flex is an all-in-one HR and payroll solution that provides staff with instant, 24/7 access to all the services they need. It is highly scalable to fit any size organization or industry type. Paychex is IRS-certified and is ESAC and BBB accredited.

Read full review

Services

Pricing

Ease of Use

Support

4. Insperity

Flexible pricing structure

Intuitive online portal for employees

Huge library of training resources

The best scalable PEO solution for small businesses

Visit Site

show less


Insperity is a US-based PEO company offering business admin services to SMBs with staff from 5 to 5000. Their services are tailored to fit all different business sectors and are highly flexible in both pricing and content. Insperity is a CPEO accredited in the US with the BBB and ESAC.

Read full review

Services

Pricing

Ease of Use

Support

5. SurePayroll

Tailored to small business and single entities.

One of the cheapest PEO options available

50% quicker payroll processing time

most affordable PEO service for individual traders, households, and small companies

Visit Site

show less


SurePayroll offers simple PEO payroll services for individual users, households, and small businesses. It is aimed at low-usage operators with basic needs that just require a quick and easy solution with no frills. SurePayroll operates under the Paychex company, which is IRS-certified and accredited with ESAC and BBB.

Read full review

Services

Pricing

Ease of Use

Support

6. XcelHR

Provides services to companies with less than 5 employees

Service-orientated to help small businesses grow

Highly customizable packages make it cost-effective

best PEO for startups and small businesses

Visit Site

show less


XcelHR is one of the best PEO & HR platforms for small companies looking for help in guiding their growth and development strategy. It offers payroll, HR, benefits, compliance, and risk management services plus an extensive range of optional add-ons to suit the needs of any size business. XcelHR is best suited to emerging businesses with goals for expansion. While not an ESAC or BBB-accredited PEO, XcelHR does benefit from IRS-accreditation and a NAPEO membership.

Read full review

Services

Pricing

Ease of Use

Support

7. TriNet

IRS Certified CPEO with ESAC accreditation

A broader selection of services than most other reputable PEOs

Competitive pricing that adapts to employee changes

One of the best known PEO companies in California with highly competitive prices

Visit Site

show less


TriNet is a well-established PEO company founded in California in 1988. The company provides tailored HR outsourcing services to SMBs across many industries and sectors. It is ideal for both small established companies or enthusiastic startups looking for a simple HR solution with competitive pricing. TriNet is accredited with the ESAC and is an IRS-certified PEO company.

Read full review

Services

Pricing

Ease of Use

Support

8. Infiniti HR

Wide range of health benefits

High level of expertise from HR professionals

All-in-one or tailored packages

best full-service HR solution for SMB that need extra features

Visit Site

show less


Infiniti HR is an HR-focused PEO solution for small and medium-sized US businesses. Its clients benefit from a wealth of expert advice from HR professionals and friendly customer service. It is ideal for midsize companies that require advanced HR services and benefits with a high level of extra support. Infiniti HR meets regulatory requirements and is accredited with the Better Business Bureau (BBB).

Read full review

Services

Pricing

Ease of Use

Support

9. Engage PEO

Excellent risk management and legal support services

Legally-licensed HR consultants

Onsite training

Best PEO for Risk Management and legal compliance

Visit Site

show less


Engage PEO is a powerful HR tool with enhanced legal compliance and risk management services. It’s highly certified consultants are on hand to deal with any queries and offer invaluable business advice for you and your employees. With a 10-employee minimum, Engage PEO is best suited to medium-sized businesses. It is an IRS and ESAC-accredited PEO

Read full review

Services

Pricing

Ease of Use

Support

10. AbelHR

Not tech-orientated

Small family run business

Good for small firms that want personal service

Best traditional PEO for personalized service.

Visit Site

show less


AbelHR provides a range of HR and payroll services to small businesses that require traditional, personal service rather than a technology-enabled HR solution. The family-run has been serving US businesses for over 20 years and knows the ins-and-outs of the PEO industry. AbelHR is a NAPEO member and an IRS-accredited CPEO.

Read full review

Services

Pricing

Ease of Use

Support

How We Ranked the Best PEO Companies - Our Research Process

During our review process for the best PEO companies, we considered as many as we could find and whittled them down to create our top 10. We then examined all aspects of each company.

The aspects we considered included:

Pricing: although many PEO companies offer pricing on a quote-by-quote basis, we investigated independent reviews to come to a good idea of what each service cost. We further looked for firms that offer good value for money. 

Services: we evaluated each company’s products against others to ascertain which companies provided the best services. We also took into account any unique features that made the PEO company stand out from the rest.

To determine business suitably, we took into account the contract structure on offer. This is important to know which businesses would be most likely to use a specific provider. 

Most PEO companies today provide some kind of online web-based portal for staff and employees to access. We investigated or where possible, tested out, the quality and availability of these. 

To gauge what users felt about the software we read through hundreds of independent reviews. These gave us great insight into the quality of customer service and the overall customer experience with each PEO company. Worker’s training and development courses are other important aspects we examined that many of the top PEO companies offer.

Finally, we ascertained what accreditations each company held to determine its legal standing and viability as a PEO provider.

At a Glance

  • Fully automated, plug-n-play payroll
  • Tech-first approach
  • Seamless 401(k) contributions
  • Corporate-level benefits and health insurance
  • 24/7 support via the live online rep
  • SOC 1 and SOC 2 compliant
  • ESAC accredited PEO company

Overview

Justworks is a US-based PEO company aimed at entrepreneurs and SMBs. It serves various sectors including professional services, financial, tech, and nonprofit sectors. Justworks’ services include payroll processing, benefits administration, and human resources.
Justworks is a modern, tech-orientated software package best suited to small US-based businesses with 10-100 employees. Some users have reported problems with foreign or external contractors and the options for benefits reimbursement are limited.

Plans and Pricing

Pricing starts at $44 a month, per employee for the basic package which offers payroll, benefits, HR tools, and HR-compliance training. This includes employee onboarding, W-2 & 1099 filings, vendor and contractor payments, reporting, accounting integrations, and 24/7 support.
The Plus package, at $89 a month per employee, includes everything in the basic package plus additional access to medical, dental, and vision health packages. These include COBRA administration, health advocacy, One Medical where available, and access to HSA/FSA accounts.
There is no free plan but you can demo the software online.

Support

Users can contact customer support on the following channels:

  • 24/7 via the live online rep
  • Telephone and email during business hours
  • Comprehensive knowledge base on its website
  • Online support is available via both Twitter and Slack

Accreditation & Compliance

Justworks compliance and accreditation include:

  • SOC 1 and SOC 2 compliant
  • ESAC accredited PEO company

Its many customers include large firms like Qubit, Axios, and Dean Technology as well as smaller companies like Sparkfund, MuseumHack, and Nomadworks.

At a Glance

  • Better Business Bureau (BBB) A+ rating
  • 70 years of experience in payroll
  • 24/7 Telephone support
  • Excellent employee health benefits
  • Additional legal support

Overview

ADP is a popular and well-trusted company that has supplied payroll services to American businesses for over 70 years. Its PEO solution, ADP TotalSource, provides an all-in-one HR, benefits, and payroll solution to small and mid-sized businesses globally. Amongst its many features are payroll, tax, document management, onboarding, electronic forms, e-verify signatures, and access to Fortune500-level benefits.
It’s the ideal solution for companies looking to offer better employee health benefits, lower workers’ compensation rates, and simplify day-to-day HR tasks. Companies that properly follow ADP’s guidance and employee processes could be covered by its inhouse legal defense. This PEO company benefit is unique to ADP TotalSource.

Plans and Pricing

Plans are sold on a quote basis depending on company size and requirements, with separate plans for small (1-49 employees) or midsized (50-999 employees) businesses. The minimum standard package includes the basic payroll, benefits, and HR services for at least five users.
The following items are optional and cost extra:

  • 401(k)
  • Compensation management
  • Applicant tracking
  • Workforce management
  • Time and attendance

Independent reviews suggest that ADP TotalSource is a good payroll and talent management solution that provides value for money.

Support

Customer service is available via:

  • Telephone, 24/7
  • Online question/answer form
  • Online chatbot
  • Blog, webinars, resource center

Since ADP is a big company with many products, there is a range of different support options for administrators, sales, employees, and partners.

Accreditation

ADP has the following accreditations:

  • Better Business Bureau (BBB) A+ rating
  • Certified by the IRS
  • Employer Services Assurance Corporation (ESAC)

At a Glance

  • All-in-one payroll and HR dashboard
  • A+ accreditation from the BBB
  • Dedicated HR consultants
  • 24/7 phone and email support
  • Cloud-based HR technology with 24/7 remote access for employees and admin

Overview

Paychex, Inc. has been providing payroll services to American and foreign businesses since 1971. Its flagship Paychex Flex product is an award-winning human capital management (HCR) solution for companies of any size. It provides managers with access to all onboarding, HR, benefits, and payroll services in one simple cloud-based platform. Staff can view their time and attendance and update their information via the convenient mobile app. The highly scalable nature of Paychex makes it a one-size-fits-all PEO.

Plans and Pricing

While pricing is offered on a quote basis, independent reviews indicate that Paychex is slightly more expensive than most other PEO solutions. It has a three-tiered package selection ranging from Express to Pro.
The Express package offers basic payroll, admin, and support services, while the Select package provides an additional compliance kit, employee learning programs, and dedicated payroll specialist. Its Pro offering is one of the best PEO packages available, with added compensation reporting, analytics, background checks, and ledger service.

Support

Paychex offers the following customer support methods:

  • 24/7 phone and email support
  • Chat support, including specific channels for employee, admin, and logging in
  • 24/7 chatbot support on the Paychex website.

Several independent reviewers complain that customer service is slow and of a low standard.

Accreditation

Paychex accreditation includes:

  • ESAC-accredited
  • A+ accreditation from the BBB
  • IRS-certified to provide PEO services under the Small Business Efficiency Act (SBEA)

Paychex is the second-largest PEO in America with 1.5 million worksite employees and 670,000 business customers across the US and Europe. This makes it one of the best international PEO companies out there.

At a Glance

  • A certified professional employer organization (CPEO)
  • Flexible pricing structure
  • Intuitive online portal for employees
  • A+ Better Business Bureau (BBB)
  • Huge library of training resources
  • 24/7 online chatbot support

Overview

Insperity is one of the best PEO companies for small business owners looking to simplify their HR strategy and payroll procedures. Beyond HR and payroll, it offers employee benefits, workers compensation, and government compliance. In particular, Insperity stands out for its extensive range of online training and safety courses, and other helpful services for both staff and managers.
Insperity is a good choice for small-to-medium-sized US firms looking to outsource a wide range of their administration services to a certified PEO. In addition to HR and payroll, its extensive offerings include recruiting, insurance, retirements, 401(k), accounting, health, and training.

Plans and Pricing

Insperity offers highly flexible pricing and terms that don’t require the customer to sign up for a long-term contract. The full-service HR packages are sold on an individual quote-by-quote basis for companies of between 5 and 149 employees, or from 150 to 5,000 employees. Customers can also use Insperity for the outsourcing of individual services like payroll or recruitment.

Support

Insperity’s customer service involves a dedicated team of experts in each field, with individual business hours contact numbers and email addresses for:

  • Workforce optimization
  • Accounting support
  • Performance support
  • Scheduling
  • Organization
  • Expenses support

There is also an online contact form and 24/7 online chatbot support.

Accreditation

Insperity is listed on the NYSE and has the following accreditations:

  • A certified professional employer organization (CPEO)
  • A+ Better Business Bureau (BBB)
  • ESAC Accreditation

Insperity’s flexible service structure means you can start small and add services as you go, making it highly scalable and convenient for businesses as they grow. However, it does require signing up a minimum of at least five employees initially.

At a Glance

  • One of the cheapest PEO options available
  • BBB and ESAC accreditation
  • 50% quicker payroll processing time
  • Different payroll types
  • Tailored to small business and single entities.

Overview

SurePayroll is an online payroll and HR service for small businesses and households. It specifically offers a tailored ‘Nanny & Household’ service to help homeowners remain compliant by paying and filing tax for their nanny, caregiver, or other helpers. The small business service makes it easy for entrepreneurs and startups to run payroll and manage deductions, benefits, and 401(k) plans.

Plans and Pricing

SurePayroll offers a range of pricing plans on a quote basis starting at $19.99/month. Clients can select different payroll types, including ‘officer only’, non-profit, church, general business, household, and others.
There is also a free trial to test out the software first. It is cloud-based and can be accessed via the web portal or with apps for Android and iPhone.
The standard features offered by SurePayroll include:

  • 401(k) tracking
  • Benefits management
  • W-2/1099 preparation
  • Worker’s compensations
  • Health insurance
  • Pre-employment screening

Support

SurePayroll support options include:

  • 24/7 chatbot support
  • Business hours telephone support (Mon-Fri, 7 am – 8 pm CT)
  • Individual support lines for sales and accounting.

There is no dedicated support agent and independent reviews indicate that service can be slow at busy times.

Accreditation

SurePayroll is a Paychex subsidiary and as such enjoys the same BBB and ESAC accreditation as its parent company.
SurePayroll clients can complete their payroll in only two days as opposed to the industry standard of four days. It can also conveniently be run online anytime, from a mobile phone, tablet, or laptop.

At a Glance

  • Highly customizable packages make it cost-effective
  • Provides services to companies with less than 5 employees
  • NAPEO member
  • Dedicated service team and HR specialist
  • Service-orientated to help small businesses grow

Overview

XcelHR is one of few companies that offer services to any size business, even with just one employee. It sells itself as more than just an HR and payroll service but rather a guide for your business to grow and improve. It offers ongoing, short-term contracts that can be canceled at any time with just 30-days notice. This makes it ideal for smaller startups that can’t afford to get tied into annual contracts.
Amongst its HR services are recruitment assistance, PTO policy admin, drug testing and background checks, and e-verification. Standard benefits include 401(k) plans, disability, and life insurance, HSA, and employee eligibility tracking. Payroll services include W-2,-3, and -4 administration, wage verification, reporting, local employment tax laws and filings, and child support.
XcelHR also has extensive training and development tools and additional risk and compliance services.
Pricing is on a quote basis and XcelHR offers a comprehensive list of what is included in the basic package plus a list of add-ons that cost extra.

Support

XcelHR customers get a dedicated service team and HR specialist to assist with any queries. They also provide:

  • Phone support
  • Online chat and contact form
  • Online resources and training

Accreditation

XcelHR is accredited by the IRS and a member of the National Association of Professional Employer Organizations (NAPEO). It, however, lacks a BBB and ESAC accreditation.

At a Glance

  • Competitive pricing that adapts to employee changes
  • IRS-certified
  • A broader selection of services than most other reputable PEOs
  • IRS Certified CPEO with ESAC accreditation
  • ‘Top Rated’ and ‘Business.com’ award winner
  • Blogs, articles, eGuides, and whitepapers

Overview

TriNet is one of the best full-service PEO solutions for SMB’s offering consulting, benefits, payroll, and risk mitigation. It serves businesses with between 5 and 1,000 employees and is best suited to firms in need of an affordable, all-in-one business administration solution.
TriNet users find the simplicity of its process attractive and appreciate the lack of bureaucracy involved in HR management. It provides a simple method of outsourcing employee management without unnecessary overheads.

Plans and Pricing

A pricing structure is not supplied by TriNet but the company does outline how costs vary based on changes to an employee’s situation. According to TriNet’s PEO comparison, its pricing model reacts favorably to any changes that employees make to their taxes, salary, or social security deductions. Independent reviews suggest that TriNet is more cost-effective than other PEO service providers.

Support

Trinet operates the following support channels:

  • Telephone and email support during business hours (6 am – 12 am EST, Mon-Fri)
  • Online contact form for inquiries
  • Blogs, articles, eGuides, and whitepapers
  • Videos, demos, and webinars

Its software PEO platform also offers helpful information in the form of workforce analytics and is easily accessible from both Android and iOS mobile devices.

Accreditation

Trinet is accreditation and awards include:

  • IRS-certified
  • ESAC
  • ‘Top Rated’ and ‘Business.com’ award winner

Trinet is well-known clients include Dailymotion, Adaptiv, and NXT Capital.

At a Glance

  • Wide range of health benefits
  • Inc.5000 company
  • High level of expertise from HR professionals
  • Toll-free business hours telephone
  • All-in-one or tailored packages
  • Free trial

Overview

Infiniti HR is a professional employer organization service (PEO) and administrative services organization (ASO) that provides various HR and payroll-related services plus benefits and risk assessment to small or midsize businesses. It serves a range of businesses in all 50 US states, as well as nonprofits, government organizations, and manufacturers.
Other features include recruitment, insurance, training, and customer service. As a company founded by HR professionals, Infiniti HR customers can gain from their wealth of experience in the industry.
Independent reviewers rate Infiniti HR highly amongst third-party service providers, although some mention the software interface can be difficult to navigate at times. The software is updated often but at times no explanation of new features is provided. The platform is cloud-based and can be accessed via a web browser from any computer or mobile device.

Plans and Pricing

Pricing is quote-based although some 3rd-party sites indicate a starting price of $159.00 per month. Services are available as a complete PEO bundle or individually. Some notable features included in the complete package include:

  • Employee training
  • HR audits
  • Applicant tracking
  • Onboarding
  • Performance management
  • Time & attendance
  • COBRA administration
  • FMLA administration
  • HSA/FSA administration
  • HIPAA compliance

A free trial is available.

Support and Accreditation

Customers can contact InfinitiHR support via:

  • Toll-free business hours telephone
  • Online contact form
  • Online Chatbot
  • Social media

Infiniti HR is a BBB-accredited PEO and Inc.5000 company.

At a Glance

  • Legally-licensed HR consultants
  • IRS and ESAC accredited
  • Onsite training
  • Excellent risk management and legal support services

Overview

Engage PEO is a cloud-based PEO solution for US companies. Its team of legal and HR experts provides excellent risk assessment, compliance, and HR outsourcing services to SMBs. It is ideal for midsize companies as it requires a minimum of 10-employees added to each plan. However, it doesn’t require long term contracts, so it’s convenient for low budget businesses wary of long term commitments.
Features include payroll, taxes, risk, compliance, HR, training, and benefits. The risk compliance features, in particular, are a highlight of Engage PEO. It offers a comprehensive range of legal services to help with employee-related legal issues like the Equal Pay Act, fair labor, disabilities, occupational safety, and others.
It also offers add-on services beyond the normal scope, such as drug testing, background checks, employment verification, and performance management.

Plans and Pricing

Engage PEO offers different pricing options depending on a company’s individual situation. You can choose to be charged per employee or as a percentage of total payroll, providing the best value for money for both small and big businesses.
Payroll, HR support, and benefits are all bundled together but some services like 401(k) and worker’s compensations are optional. Packages are sold on a rolling, month to month basis and can be canceled at any time with 30 days notice. Plans start at 10 employees upward.

Support and Accreditation

Engage PEO clients can speak to a specialist support agent for each area, including an account manager and human resources consultant (HRC). Account managers are Society for Human Resource Management (SHRM) certified so they can offer legal advice.
Additional support is available via:

  • Business hours phone
  • Online contact form

Engage PEO is accredited by the IRS and ESAC but not the Better Business Bureau (BBB).

At a Glance

  • Good for small firms that want personal service
  • Not tech-orientated
  • CPEO-accredited by the IRS
  • Small family run business

Overview

Abel HR is a family-owned PEO offering business solutions for small to midsize companies in the US. It offers customers the freedom to tailor packages and select benefits that provide them with the best value. It offers a more traditional service than most modern, online-only PEO solutions available today. For this reason, it may be more attractive to smaller, less tech-orientated companies.
AbelHR services include HR compliance and admin, employee benefits, payroll and taxes, workers’ compensation, training, and compliance. It has an excellent reputation within the PEO industry due to its personal approach. Customers benefit from monthly CPA confirmations, a qualified 401(k) plan, free direct debits, credit union membership, and full-time risk management on-site.

Plans and Pricing

Pricing is not supplied and is provided only on a quote-by-quote basis. No other information regarding individual plans is available.

Support and Accreditation

Customer service is provided by telephone during business hours. Abel HR prides itself on personal service by an in-house expert rather than automated responses.
AbelHR is CPEO-accredited by the IRS but not accredited by the BBB. Its payroll taxes are certified by a CPA firm and its a member of NAPEO.

How a PEO Can Help Your Business?

The main benefit of a PEO is the time and cost-savings. By having an all-in-one service provider for HR, payroll, tax, and other admin tasks, a company can greatly reduce its staff and premises requirements. The PEO will also help to ensure that your company is fully compliant with all necessary tax, legal, and safety regulations. This reduces your exposure to risk and lets you focus on running the business without any worries.
The best-rated PEO companies often have access to more affordable and higher quality benefit packages than your company could arrange themselves. This gives your greater leverage when competing with other firms for the most highly-skilled job seekers and will provide existing employees with loyalty incentives. Good benefits packages should include:

  • Healthcare
  • Life insurance
  • Disability coverage
  • Retirement plans

Although the PEO sorts out onboarding and paychecks, your employees remain part of your staff. If your company contracts a PEO to process payroll, this will not affect your eligibility for business loans such as the Paycheck Protection Program (PPP).

How Much Does a PEO Service Cost?

Unfortunately, one of the downsides of a PEO is the lack of transparency in pricing structures. This happens because fees are often calculated as a percentage of payroll. It also involves many factors such as business size, employee numbers, and services required.

For this reason, the majority of PEO payroll companies offer their services on a quote-by-quote basis. Some PEO companies have a set rate per employee, charged either monthly or annually. This can be anywhere between $20 and $200 per employee depending on all the various factors involved. 

Basic packages almost always include HR, payroll, and benefits services as default. Additional upgraded packages may include:

  • Compliance 
  • Workers’ compensation
  •  Insurance 
  • 401(k) 
  • Risk management
  • Additional benefits 

Many PEO companies also offer these services individually so you tailor your package with only the products you require.

What to look for in a PEO company?

When choosing the best PEO providers to partner with there are a number of factors to consider. 

Customer Service

Whichever PEO you choose, you will likely spend a lot of time communicating with them. Large, busy PEO companies may offer better benefits but can’t provide dedicated customer support agents. Depending on how you operate your business, you may want to consider a smaller PEO if you want more personal customer service.

Online Services

These days, much of employee management can be done by the employee or employer themselves via a self-service portal. This gives employees greater control over their work life and speeds up the turnover time on certain operations. Always check to see what kind of online services the PEO offers, as you and your staff will be using these a lot.

Benefits

Benefits are often the key selling point of many PEO companies. However, many PEOs will only offer healthcare packages from their partnered providers so if you need a specific package, check if the PEO is able to offer it. Good benefits are important to attract top talent but should also be relevant to your existing staff.

Company Size and Requirements

Different PEO companies are better suited to certain size businesses. It is important to choose one that can best serve your sized business but also one that can scale up with your business if you expect growth.

Accreditations and Contract

Although a lack of accreditations doesn’t necessarily indicate a bad company it can be important for certain legal requirements to use accredited PEO firms. Always read the contract carefully and enact due diligence in regard to the company’s history, partners, and certifications.

Wrap Up

PEO companies can be highly beneficial, especially to small firms that are growing but can’t yet afford their own HR and payroll department. For peace-of-mind, they can also provide the regulatory compliance and legal coverage needed.

A PEO company can be quite expensive and it’s often difficult to get an accurate idea of this cost if the company doesn’t offer flat rates. This is why it’s important to always do as much research as possible and read independent PEO company’s reviews before making your choice.

FAQ

What is the difference between a PEO and a staffing company?

Staffing companies lease out workers to select companies that are never personally involved with the employee. PEO companies don’t provide temporary staffing to supplement workforce shortages in this way. Rather, PEOs are the co-employer of permanent staff members and help to manage all administrative details.

Who should use a PEO?

Businesses that need to focus resources on more important activities may enlist a PEO to take care of time-consuming administrative HR concerns. This can be cost-effective as it reduces the need to support an in-house HR and payroll department.

How does the co-employment arrangement work?

A business and a PEO company form a partnership defined by terms in a client service agreement (CSA). The PEO takes care of all wages, taxes, W-2 preparation, benefits, and other services for the employees while the company manages all other business-related activities. In some cases, certain responsibilities can be shared between the company and the PEO.

What does it mean if a PEO is accredited?

If your PEO is not accredited or certified by the IRS or Small Business Efficiency Act (SBEA), it could leave your company liable to any unpaid taxes and federal agency penalties.
There are a few main accreditations to look for in a Professional Employer Organization. One of the most common is the Employer Services Assurance Corporation (ESAC), although Better Business Bureau (BBB) accreditation is also popular and well-respected. It’s always best to choose a provider that has a CPEO designation by the IRS.

How long does it take to get started once I choose a PEO?

The process of finding a PEO should not be rushed as it’s costly and difficult to fix errors later on. The more time you commit to finding the right PEO, the better it will pay off in the long run.

The best PEO companies will usually take around 3-4 months to complete all the steps required to get up and running. The process involves completing due diligence, negotiating a contract, and onboarding verifying I-9 forms for each employee — so it can take longer for larger companies.