What Is Included In the Cost of PEO Services?

A professional employer organization or PEO is a firm that provides human resource management services to businesses, allowing them to outsource that entire department. At SPLI, we specialize in offering services including workers compensation coverage, payroll administration, tax compliance, employee management, and more.

While a small business can certainly benefit from such services, it helps to understand the cost before proceeding. Several factors can influence the cost of PEO services. Take a closer look at how they break down and what needs to be considered for your business.

Onboarding Costs

When you get started with a PEO, there are costs that go along with getting them set up with your business and its systems. Transitioning HR systems and integrating company data takes time and labor, so it typically has a cost that goes along with it. Additionally, you may have to implement some staff training sessions. While these sessions may not directly cost you money, to the PEO, it does cost time.

Operating Costs

Once PEO integration is complete, you can properly begin to take advantage of their services. In most cases, PEO fees are charged either per employee or by a payroll percentage. However they choose to implement their fees, services such as benefits management, payroll processing, and tax compliance among others are covered by these “administration fees” (wording may vary by PEO).

If the PEO you work with uses specialized software for their services, you may have to pay platform fees in addition to traditional service fees. The nature of these fees can be complicated, so make sure you opt for an organization that is transparent about their pricing and willing to discuss each aspect in detail.

Opportunity Costs

While a PEO comes with fees, their services can do quite a bit to reduce costs for your business in other areas. Small businesses especially benefit from PEO services since payroll administration and processing do not have to be handled by the owner. 

Some small business owners spend up to 40% of their time at work dealing with human resources-related tasks rather than actually growing their business. Big companies have the luxury of entire departments that take care of these tasks. There’s real value in bundling all of these conveniences under one umbrella — the PEO admin fee — to keep everything organized and predictable. While the total cost may seem impactful, each individual service your PEO is providing to you does not cost much on its own when you consider how it is all bundled together.

With more time for owners to focus on growing their business, they may have better opportunities for growth by doing what they do best rather than dealing with payroll and HR.

How SPLI Can Save Your Business Time and Money

At SPLI, we offer premier PEO services letting your small business outsource payroll and HR entirely leaving you to focus on what you do best. Get in touch with our team today to learn more about the cost of our PEO services and get a free quote.