PEO vs. payroll company: what you actually get for the money
A payroll company cuts checks. A PEO shares employer responsibility — payroll, benefits, workers' comp, and compliance — through co-employment. The difference shows up in your benefits renewal, your workers' comp rate, and who answers when an employee files a claim.
Below: a straight side-by-side, an honest read on when a PEO is the wrong answer, and a comparison of the 3–5 best-fit PEOs for your business — built by a broker who is paid the same regardless of which one you pick.
Free to your business. PEOs pay the broker fee, you don't.
Payroll company vs. PEO vs. ASO
The three models employers actually choose between. Costs are structural, not quotes — your real numbers depend on headcount, state, and comp class.
Want your own numbers in this table? Send your headcount and current setup and we'll fill it in with real quotes. Or start with the PEO cost breakdown.
What co-employment actually means
The word scares owners more than the arrangement warrants. It is a split of paperwork and liability — not of control.
You keep
- Who you hire and who you fire
- Schedules, pay decisions, performance
- How the work gets done, day to day
- Your culture, your brand, your customers
The PEO takes
- Payroll processing and payroll tax filing
- Benefits administration and open enrollment
- Workers' comp policy and claims handling
- HR compliance guidance and documentation
A PEO usually makes sense if
- You have employees and your compliance exposure is growing
- You're in a higher-risk or regulated industry
- You need stronger benefits to hire against bigger competitors
- Workers' comp claims are eating your time
- You're expanding across state lines
A PEO is the wrong answer if
- You only need basic payroll
- You have no W-2 employees
- You want a hands-off vendor with zero collaboration
- You'd rather own benefits and risk entirely in-house
We'll tell you when it's this one. Half of a broker's value is the "don't."
How employers typically move into a PEO
Implementation means onboarding employees, aligning payroll timing, and transitioning benefits. Plan around a payroll cycle, not a calendar date.
Decide whether a PEO fits your business model at all
Compare pricing structures and what each one includes
Evaluate benefits, workers' comp, and the service model
Select the best fit and plan the transition
A casino with about 110 employees left a national payroll vendor over service. The comparison said ASO, not PEO: north of $6,000 a year back, full-cycle recruiting included, and a 401(k) for retention.
We don't sell PEO. We sell the comparison. Read the casino story → · PEO, ASO, or stay put
Get your PEO comparison
Free to your business. The PEO you choose pays the broker fee — and it's the same fee whichever one you pick.
Questions employers ask us first
Do my employees start working for the PEO?+
No. Your people keep working for you — same manager, same job, same culture. The PEO becomes a co-employer of record for payroll, taxes, benefits, and workers' comp only.
Is a PEO more expensive than my payroll provider?+
On the admin line, almost always yes. On all-in cost — benefits premiums, workers' comp, the hours you spend on compliance, and the cost of one bad claim — it's frequently less. That's the comparison worth running, and it's the one we build for you.
Can I leave a PEO later?+
Yes. Terms vary, so renewal timing and transition requirements matter more than anything else in the contract. We flag those before you sign, not after.
Is a PEO only for large companies?+
It's the opposite. Pooled benefits and a master comp policy are most valuable to employers too small to negotiate on their own — most of our clients run 10 to 500 employees.
What does using a broker cost me?+
Nothing. The PEO pays the broker fee out of a budget it already has, and it's the same fee whichever one you choose — so there's no incentive to steer you.
Does a PEO replace my accountant or attorney?+
No. A PEO handles HR and employment administration. Your CPA still owns tax strategy and your attorney still owns legal matters.
Still not sure which model fits?
Send us your headcount and your last benefits renewal. We'll tell you whether a PEO changes your numbers — and say so plainly if it doesn't.