PEO Pricing

While each PEO provider differs, PEPM fees usually can include:

• Payroll processing and payroll tax administration
• HR expertise
• Benefits administration
• Workers’ compensation administration
• HR technology platform access
• Employee onboarding tools and documentation management

Certain services—like background checks or advanced training modules—may be offered à la carte.

Common drivers can include:

• Headcount size (volume pricing may apply)
• Geographic footprint (multi-state compliance complexity)
• Service complexity (e.g., integrated performance management or additional compliance support)

No. Benefit costs—such as medical, dental, and vision—are separate and depend on plan selection, carrier rates, employee enrollment, and other factors. The PEPM fee covers administration, not the benefits themselves.

Payroll tax administration is included, but the payroll taxes themselves (e.g., federal, state, local withholding, employer FICA, FUTA, SUTA) are always separate business costs. Payroll tax administration can include calculating, withholding, remitting, and filing payroll taxes for payroll processed through the PEO platform on the client’s behalf.

They can. PEPM pricing fluctuates with active headcount, seasonal staffing changes, and—if applicable.  

For small and mid-sized businesses, a PEO can be more cost-effective compared to a full internal HR and payroll team. The PEO services provide support in areas typically handled by HR generalists, payroll specialists, and benefits administrator. While costs can vary, many SMBs find that PEO support at a few hundred dollars per employee per month may be easier to support than covering an annual salary plus benefits for dedicated HR staff—plus it provides access to broader expertise and compliance support.

Another consideration is that even for companies that use a PEO there remains strategic HR work including recruiting and developing talent and building a strong company culture that is done in-house; and by using a PEO it allows companies to spend more time on those strategic HR initiatives.

Yes—especially when considering the total cost of HR administration, risk, payroll concerns, technology, and training. Potential savings can come from:

• Reduced administrative overhead
• One technology platform
• Time returned to leaders, which can be redirected to revenue-generating work

Add-ons that may include time & attendance applications, workers’ compensation, PEO-sponsored benefits, payroll taxes, new-hire state reporting fees, background checks, drug screening, independent contractor payments, ACA form processing, learning management modules, certain risk-mitigation and other strategic services. Many PEOs also charge a one-time onboarding or implementation fee when you first join.  

Most PEOs require an annual agreement and may have early-termination fees. Some offer month-to-month contracts but may price them higher. Always review the contract for renewal terms, cancellation windows, and any minimum fee or employee count requirements.