Professional Employer Organization (PEO)

A Professional Employer Organization (PEO) is a company that provides HR services for small and medium-sized businesses.

A Professional Employer Organization (PEO) is a company that provides HR services for small businesses. They manage a variety of operational tasks such as:

Payroll and direct deposits
Health, dental, vision, and life insurance benefits administration
Dependent care
401(k) enrollments
Workers’ comp administration
Regulatory compliance

PEOs are more than just an outsourcing option. They’re actually a co-employment agreement between your business and a third party. The PEO technically employs your staff and handles wages, tax withholdings, W-2s, compliance, and reporting. This arrangement frees up the rest of your business to focus on providing great products and services.

Because PEOs have developed administrative and compliance expertise, they can often save employers on HR costs. However, PEO services usually involve a flat service fee plus a per-employee monthly fee. Sit down and run some numbers to see if a PEO makes financial sense for your business.