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Updated Jun 07, 2024

The Best PEO Service Providers of 2024

These top PEO services take away the burden of managing a team of employees, so you can focus on growing your business instead.

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Kaylyn McKenna, Business Operations Insider and Senior Analyst
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This guide was reviewed by a Business News Daily editor to ensure it provides comprehensive and accurate information to aid your buying decision.
Best Industry Expertise
TriNet PEO
Trinet logo
  • Starting Cost: Custom
  • Contracts: Custom
  • ESAC- and IRS-certified
USALinks to TriNet PEO
Visit Site
  • Starting Cost: Custom
  • Contracts: Custom
  • ESAC- and IRS-certified
Best for Startups
Justworks
JustWorks company logo
  • Starting Cost: $59/employee/month
  • Contracts: Month-to-month or annual
  • ESAC- and IRS-certified
USALinks to Justworks
Visit Site
  • Starting Cost: $59/employee/month
  • Contracts: Month-to-month or annual
  • ESAC- and IRS-certified
Best for International Payroll
Deel PEO
Deel logo
  • Starting Cost: $599/month
  • Contracts: Month-to-month
  • Not ESAC- or IRS-certified
USALinks to Deel PEO
Visit Site
  • Starting Cost: $599/month
  • Contracts: Month-to-month
  • Not ESAC- or IRS-certified
Best for Benefits
ADP TotalSource
ADP company logo
  • Starting Cost: Custom
  • Contracts: Month-to-month, annual or multiyear
  • ESAC- and IRS-certified
USALinks to ADP TotalSource
Visit Site
  • Starting Cost: Custom
  • Contracts: Month-to-month, annual or multiyear
  • ESAC- and IRS-certified
Best for Risk Management
Insperity PEO Services
Insperity company logo
  • Starting Cost: Custom
  • Contracts: Annual or multiyear
  • ESAC- and IRS-certified
USALinks to Insperity PEO Services
Visit Site
  • Starting Cost: Custom
  • Contracts: Annual or multiyear
  • ESAC- and IRS-certified

Table of Contents

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To select the best PEO services for small businesses, our team of experts researched and analyzed some of the biggest names in the space. We conducted demos with each PEO company and asked probing questions about how their services work, pricing structures and fees, and the level of customer support entrepreneurs could expect. We also carefully reviewed the terms and conditions surrounding payroll management, benefits administration, and onboarding of new employees. We considered whether PEO services were limited geographically or if they offered international services as well. Finally, we reviewed customer feedback to see what each service’s existing clientele had to say about their performance. Learn more about our methodology.

If you have employees but don’t have internal human resources (HR) staff, you may find yourself at a crossroads, unable to manage your HR processes effectively. One solution is to partner with a professional employer organization (PEO). A PEO takes the place of an internal HR department by handling your payroll, employee benefits and other HR-related needs, via a co-employment model. PEO services can also be excellent resources for small businesses expanding into different states or countries that need help juggling laws and compliance issues.

When selecting a PEO service for your business, you have several factors and features to consider. Some PEO services are geared towards international business or particular industries, while others excel in specific areas of HR, such as benefits or onboarding. To help you find the best PEO for your business, we’ve spent dozens of hours researching and comparing the best solutions. We narrowed those choices for you, evaluating them on important criteria like cost, features, customer service and platform user-friendliness.

TriNet platform

This screenshot, taken from a demo we conducted with TriNet, is an example of what a PEO platform looks like. PEO software typically includes a left navigation bar with tabs for things like payroll, benefits, time tracking, people, integrations and settings. Source: TriNet

How We Decided

Our team spends weeks evaluating dozens of business solutions to identify the best options. To stay current, our research is regularly updated.

60

considered

9

reviewed

7

selected

Our team spends weeks evaluating dozens of business solutions to identify the best options. To stay current, our research is regularly updated.

60

considered

9

reviewed

7

selected

Compare Our Best Picks

BND Ribbon
Our Top Picks for 2024
TriNet PEO
Justworks
Deel PEO
ADP TotalSource
Insperity PEO Services
Rippling PEO
Papaya Global PEO
Rating9.7/109.6/109.4/109.1/109.1/109.5/109.2/10
Best Use Case

Best for Industry Expertise

Best for Startups

Best for International Payroll

Best for Benefits

Best for Risk Management

Best for Growing Businesses

Best for International Compliance

Certifications

IRS, ESAC

IRS, ESAC

N/A

IRS, ESAC

IRS, ESAC

N/A

N/A

Pricing

Custom pricing

$49-$99 per employee per month

Employer of record services starting at $599 per month

Custom pricing

Custom pricing

Custom pricing

A la carte pricing. Payroll support starts at $20 per employee per month

Employee Minimum

5

2

N/A

5

5

5

1

Customer Service

Phone, email, live chat, dedicated specialists

Phone, email, live chat, dedicated account manager

Live chat, dedicated agent

Phone, email, live chat, dedicated specialists

Phone, email, live chat, dedicated specialists

Phone, email, live chat

Phone, email, live chat

24/7 Support Available

No

Yes

Yes

No

No

No

No

Mobile App

Yes

Yes

Web app only

Yes

Yes

Yes

Yes

Review Link
Scroll Table

Our Reviews

Trinet logo
  • Starting price: Custom quote
  • Key Features: Flexible per-employee pricing, industry-specific expert support, extensive benefits options
  • Free Trial: No
Editor's Rating: 9.7/10
Visit Site

Why We Chose TriNet

TriNet offers service plans and support offerings tailored to your industry and specific circumstances. We like that TriNet’s specialized experts can provide hands-on guidance in navigating relevant compliance matters, industry challenges and general HR concerns like benefits and payroll. Of all the PEOs we reviewed, TriNet was one of only two that offered industry-specific tools and guidance. TriNet has customer support teams with expertise in your industry and provides the most comprehensive industry-specific support features. We found this to be a valuable resource for business owners who need help navigating the issues and regulations that are unique to their industry. TriNet even offers tools for highly regulated industries, such as financial services or healthcare.

TriNet Cloud Help Desk

We like that users can access the TriNet Cloud Help Desk for step-by-step tutorials on navigating the system. Source: TriNet

TriNet PEO Pricing & Features

Standout Features Add-on Features Cost
TriNet technology platform, administrative HR services, benefits administration, payroll, employee training and development, risk mitigation Global payments, contactor payments Custom quote required

TriNet Pros

  • TriNet customers have access to industry experts for HR and compliance support.
  • TriNet offers impressive benefits from top health plans and providers.
  • The TriNet platform is easy to navigate.

TriNet Cons

  • Businesses in certain high-risk industries may not be eligible for PEO service through TriNet.
  • TriNet PEO has a five-employee minimum.
  • TriNet doesn’t list pricing online.

What TriNet Users Have to Say

Users of TriNet like the platform’s employee onboarding and training features, as well as its implementation process, ability to scale easily and overall value. However, some users list customer support as a limitation, stating that it can be somewhat difficult to reach. This limitation may be avoided by opting for TriNet’s advanced support services, Connect 360. TriNet earned an 7.1/10 rating on TrustRadius.

READ OUR FULL TRINET REVIEW HERE

JustWorks company logo
  • Starting price: $59/employee/month
  • Key Features: Transparent pricing model, easy-to-use platform, 24/7 customer support
  • Free Trial: No
Editor's Rating: 9.6/10
Visit Site

Why We Chose Justworks

Justworks is a comprehensive PEO that gives startups access to corporate-level benefits, automated payroll services, compliance resources and HR tools in one easy-to-use platform. We are pleased to see that Justworks customers have access to HR experts who can offer guidance and advice on employer responsibilities and HR concerns. Justworks subscribers also get access to a dedicated account manager who offers prompt, personalized support. When we tested the software, we discovered that Justworks’ tech-forward platform has a more updated, intuitive design compared to other PEO providers that we reviewed. This technology aligns well with the current startup culture and also provides a low learning curve for managers and startup founders who may be new to HR and PEO platforms.

Justworks platform

When testing the Justworks platform, we were pleased with its clean, user-friendly design. Source: Justworks

Justworks PEO Pricing & Features

Service Plan Standout Features Cost
PEO Basic ATS integrations, onboarding and offboarding, document storage, org chart and directory, payroll, time off management, reporting, compliance assitance, HR consulting, 24/7 support, commuter benefits $59/employee/month ($49/employee/month after 50+ employees)
PEO Plus Everything in PEO Basic, plus medical, dental and vision Insurance; HSA and FSA accounts, health advocacy services and One Medical access $99/employee/month ($89/employee/month after 50+ employees)
Add-On Feature Time tracking $8/employee/month
Add-On Feature International contractor payments $39/paid contractor/month
Add-On Feature Employer of record $599/employee/month

Justworks Pros

  • Justworks offers 24/7 support through phone, email and live chat.
  • Customers with over 15 employees have access to a dedicated account manager for prompt, personalized care.
  • It is one of the few PEOs we reviewed that lists pricing online, which makes it easy for startups to know whether it’s within their budget quickly.

Justworks Cons

  • The Basic plan does not include employee benefits, such as health insurance.
  • It is not meant to support large companies with more than 500 workers.
  • Certain high-risk industries, like heavy construction, are not eligible for Justworks.

What Justworks Users Have to Say

Users of Jusworks like the user-friendly platform and employee onboarding tools. They also say that Justworks’ customer support is helpful. The biggest drawback users mention is reporting limitations. Justworks earned a 4.3/5 rating on Trustpilot, and a 7.8/10 rating from Justworks users on TrustRadius.

READ OUR FULL JUSTWORKS REVIEW HERE

Deel logo
  • Starting price: Custom quote
  • Key Features: Payroll support in 150+ countries, automated contractor payments, intuitive payroll technology
  • Free Trial: No
Editor's Rating: 9.4/10
Visit Site

Why We Chose Deel

While many of the PEO services we reviewed treat international payments as an add-on or second thought, Deel puts international payroll at its core. The service offers flexible payment options for global employees and contractors along with intuitive payroll technology. We like that Deel can run payroll in over 150 countries and handles local tax and payroll compliance. When we tested Deel, we were pleased to find that it employs in-house payroll experts in local jurisdictions across the globe to provide detailed local expertise on payroll matters. These experts can advise on managing payments, expense reimbursements, navigating local payroll or PTO compliance, and more. With Deel’s Compliance Hub, employers can easily view an ongoing newsfeed of regulatory changes as they occur, and receive reports that flag potential payroll compliance issues like worker misclassification or minimum wage violations.

Deel platform

If Deel is paying workers on your behalf, you can easily track funding within the platform.  Source: Deel

Deel Pricing & Features

Service Plan Standout Features Cost
Deel HR Custom documents, data storage, org charts, people directory, expense and time off management, workflow automation, HR reports Free
Deel Payroll Onboarding, offboarding, benefits, payroll, payslips, taxes, global payroll reports, government declarations, compliance assistance Custom quote required
Deel Contractor Management Locally compliant contracts, local law guidance, local tax agreement collection, payroll, automated invoicing, expenses, time off Starts at $49 per month
Deel EOR Local payroll, benefits, taxes, and compliance; employee benefits; local HR and legal expert support, integrations Starts at $599 per month
Deel Immigration Visas sponsorship, ongoing visa support, application tracking, local immigration expert support Custom quote required

Deel Pros

  • Deel supports international payroll and HR in over 150 countries.
  • Customers can access 24/7 chat support to resolve payroll questions or concerns quickly.
  • Deel can get businesses up and running with international payroll fairly quickly, and customers noted that the company provides an easy payroll set-up process.

Deel Cons

  • Immigration support is more limited than some other international PEOs.
  • Deel is not ESAC- or BBB-accredited.
  • It has limited performance management features.

What Deel Users Have to Say

Users of Deel like that the vendor provides effective payroll and contract management features, alongside helpful customer support. The most significant drawback users mention is not having a clear understanding of fees. Deel earned a 4.8/5 rating on Trustpilot and a 6.5/10 rating from Deel users on TrustRadius.

READ OUR FULL DEEL REVIEW HERE

ADP company logo
  • Starting price: Custom quote
  • Key Features: Strong benefits offerings, robust expert support, user-friendly employee self-service
  • Free Trial: No
Editor's Rating: 9.1/10
Visit Site

Why We Chose ADP TotalSource

Most PEOs provide benefits support, but ADP’s benefits tools stand out from the crowd. We like that ADP offers several plans, including custom options that can meet the needs of your employees. Working with ADP is an easy way for smaller businesses to provide high-level benefits that would not typically be available to them. When we tested its API-driven technology, we found that ADP can speed up your benefits administration process and improve accuracy by automatically syncing data between the platform and benefit carriers. Because the system updates in real time, employees can seamlessly configure their benefits and view live updates as changes are made.

ADP benefits enrollment

ADP can simplify the benefits enrollment process by providing employees with plan comparisons. Source: ADP

ADP TotalSource Pricing & Features

Service Plan Standout Features Cost
ADP TotalSource ADP Workforce Now technology platform, onboarding, document management, employee benefits, payroll processing, employee learning materials, reporting, unemployment claims administration, workers’ compensation and claims management, compliance support, full-service implementation, dedicated support representatives Custom quote required
Add-on Features Recruitment, time tracking, employee scheduling, performance management, employee engagement, leadership training, compensation management, succession planning, integrations Custom quote required

ADP TotalSource Pros

  • ADP offers robust benefits offerings from top benefits providers.
  • The software automates various benefits administration tasks such as enrollment, eligibility tracking, and compliance reporting.
  • Customers can receive hands-on support from benefits experts.

ADP TotalSource Cons

  • The company does not list pricing on its website, so you must contact the sales team for a custom quote.
  • Its PEO plan has a minimum employee requirement.
  • It doesn’t offer a free trial.

What ADP TotalSource Users Have to Say

Real-life users of ADP TotalSource like its essential HR features, like employee benefits administration and payroll processing. The biggest drawback users mention is the look of the software – some customers say it looks a bit older than other competitors. ADP TotalSource earned a 6.1/10 rating on TrustRadius.

READ OUR FULL ADP TOTALSOURCE REVIEW HERE

Insperity company logo
  • Starting price: Custom quote
  • Key Features: Robust expert support, workplace safety guidance, educational employee resources
  • Free Trial: No
Editor's Rating: 9.1/10
Visit Site

Why We Chose Insperity

After researching and testing Insperity, we found that it provides flexible coverage and comprehensive PEO service options to small businesses that want to mitigate risks. Businesses that partner with Insperity have access to more than compliant training resources, payroll processing support, ACA-compliant benefits administration and workplace safety experts. Insperity helps analyze and overhaul various business processes to make your company more efficient and reduce compliance risks. We also like that Insperity is proactive about alerting businesses to any changes in employment law. Insperity doesn’t wait for employers to have questions; instead, the PEO contacts the employer when changes occur.

Insperity dashboard

Insperity’s dashboard provides employers and employees with important HR information. Source: Insperity

Insperity PEO Pricing & Features

Service Plan Standout Features Cost
For Small Business HR administration, employee benefits administration, payroll processing, compliance support, all-in-one HR technology, HR support Custom quote required
For Middle Market Business HR administration, employee benefits administration, payroll processing, compliance support, risk mitigation, advanced workforce technology, analytics, HR support Custom quote required

Insperity Pros

  • Insperity offers advanced compliance and risk mitigation tools, including support from compliance and safety experts.
  • Employees can access an extensive library of training and development resources from Insperity.
  • Insperity can train supervisors on new compliance matters and help businesses update their written employee policies to reflect the new requirements.

Insperity Cons

  • Insperity PEO isn’t compatible with third-party payroll processors.
  • There is a 5-employee minimum to enroll with Insperity PEO.
  • Insperity doesn’t list pricing on its website.

What Insperity Users Have to Say

Users of Insperity like its onboarding features and overall platform usability. The biggest drawback users mention is its pricing. Insperity earned a 4.4/10 rating on TrustRadius.

READ OUR FULL INSPERITY REVIEW HERE

Rippling company logo
  • Starting price: $8/employee /month
  • Key Features: Customizable HR plans, extensive workflow automation, device and inventory management, hundreds of integrations
  • Free Trial: No
Editor's Rating: 9.5/10
Visit Site

Why We Chose Rippling PEO

Rippling is a scalable PEO service that is well-suited for growing businesses thanks to its seamless recruiting and onboarding process, advanced multistate compliance tools and flexible tech platform. When we tested the platform, we liked that its automated applicant tracking platform allows you to funnel top talent through the hiring process quickly. Once a new worker is officially hired, adding them to the platform takes only a few minutes. When growing businesses need to add new locations or hire remotely, Rippling can handle local tax registration and configure different labor laws and minimum wages for employees across various states.

Rippling platform

This screenshot, taken from a demo we conducted on the Rippling platform, gives you an idea of how user-friendly the hiring process is. Source: Rippling

Rippling Pricing & Features

Service Plan Standout Features Starting Cost
Rippling Unity*  Onboarding and offboarding, company directory, workflows and automation, analytics, policy management, document management, compensation bands,  leave management, permissions and approvals management, admin and field privileges, Compliance 360 $8 per user, per month
Rippling PEO State unemployment tax registration, access to large group health plans, employee training courses, healthcare guidance, PHR-certified HR advisors, Custom quote required
Add-on Features Recruiting, headcount planning, employee benefits administration, time and attendance, payroll, ACA and COBRA administration, learning and performance management, employee surveys, ASO, EOR, HR Help Desk, app and device management, corporate cards, inventory management, bill pay, expense management Custom quotes required

*Every user must purchase Rippling’s base plan, Rippling Unity. From there, you can add other Rippling PEO and other features to your plan.

Rippling PEO Pros

  • Rippling is a scalable platform that meets the needs of small businesses with employees in various cities and states.
  • If your business outgrows the PEO model, you can easily switch PEO services off and just use Rippling’s tech platform.
  • Rippling’s device inventory management feature manages your devices for you (e.g., assigning, setting up, wiping and storing devices).

Rippling PEO Cons

  • Rippling does not have ESAC or IRS accreditation.
  • Users who want to access several of Rippling’s add-on features may find the platform to be expensive.
  • Rippling PEO has a minimum requirement of five employees.

What Rippling PEO Users Have to Say

Real-life users of Rippling like the user-friendliness of the platform. They commented on useful features like employee benefits administration, device management and employee self-service. The biggest drawback users mention is the total cost. Rippling earned a 4.6/5 rating on Trustpilot, and an 8.5/10 rating from Rippling customers on TrustRadius.

READ OUR FULL RIPPLING REVIEW HERE

Papaya Global logo
  • Starting price: $15/employee/month
  • Key Features: Local currency payments, local compliance guaranteed, full liability coverage
  • Free Trial: No
Editor's Rating: 9.2/10

Why We Chose Papaya Global

Papaya Global is an international PEO that offers full-fledged PEO services to small and midsize businesses. Compliance support is one of the most significant benefits of working with an international PEO. We were impressed that Papaya Global’s flexible service and compliance expertise spans 160+ countries. It makes it easier to stay compliant by connecting you with compliance experts who know the requirements for each country they operate in. Compliance tools are built into Papaya Global’s tech platform to help automate compliance processes as well. The company’s global compliance engine ensures that country-specific payroll and labor laws are up to date and strictly followed. We like that Papaya Global also conducts a compliance check before processing payroll.

Papaya Global analytics

Papaya Global allows you to view a variety of pay information from one dashboard, which is great for global employers who want to keep an eye on payroll, total costs, and compliance. Source: Papaya Global

Papaya Global Pricing & Features

Service Plan Standout Features Starting Cost
PayrollPlus  Time and attendance, payroll, workforce wallets, authority payments, user permissions, analytics, employee self-service, fraud protection, integrations, dedicated HR support $15/employee/month
Contractor Payments & Management Contractor classification, invoicing, one-click approvals, contractor payments, bulk payments, payouts in 100+ currencies, payment reconciliation, reporting, $30/contractor/month
Agent of Record Contractor classification and management, record-keeping, built-in payments, local compliance, liability coverage, HR and legal support, knowledge base $200/contractor/month
Employer of Record Contract generator, employee onboarding, certified CPA firms, EOR payments, secured funds wallet, employee portal, local compliance, liability coverage, knowledge base, 24/7 support $599/employee/month
Global Workforce Payments Financial data connectors, account validation, fraud prevention, payroll wallets, bulk payments, split payroll payments, authority payments, record-keeping, automated payment reconciliation, reporting $2.5/transaction

Papaya Global Pros

  • Papaya Global can provide onboarding, payroll and benefits support in 160+ countries.
  • Business owners can access a wealth of payroll and HR data insights and visualizations.
  • Papaya helps you pay and manage all worker types – employees, contractors, full- and part-time, domestic and global – from one central location.

Papaya Global Cons

  • Papaya Global is more expensive than the domestic PEOs we reviewed.
  • It does not have ESAC or IRS accreditation.
  • Its performance management features are limited, compared to other vendors we reviewed.

What Papaya Global Users Have to Say

Real-life users of Papaya Global like how the platform centralizes all of their global HR information into one location. The biggest drawback users mention is the cost. Papaya Global earned a 2.7/5 rating on Trustpilot, and a 9.1/10 rating from Papaya Global users on TrustRadius.

READ OUR FULL PAPAYA GLOBAL REVIEW HERE

What Is a Professional Employer Organization?

A professional employer organization, or PEO, is an HR service that operates through a co-employment model, which means your employees are on the PEO’s books but still fall under your management. PEOs manage functions like payroll, HR administration, employee benefits, risk management and regulatory compliance, workers’ compensation, and employee training and development for their client businesses. When you choose a PEO, make sure it can perform all of the HR functions you need and can scale with your business as it grows.

It is important to find a trustworthy and certified PEO, since the service will be deeply integrated with your company. PEOs can earn certain certifications and accreditations to demonstrate that they abide by best practices, meet strict financial guidelines, and comply with all employment laws and regulations. The ESAC, IRS and BBB all have accreditation programs for qualifying PEOs.

PEO Costs

PEOs use two main pricing structures for small businesses: per-employee fees and percentages of total monthly payroll. These costs range from $40 to $160 per person, or from 3 to 12 percent of your monthly payroll, depending on the company and plan you choose.

You should also consider the contract lengths. Some PEOs offer short-term contracts, while others lock you into multi year deals. Here are some other important factors that affect the cost of your PEO service.

Plan Structure

Find the plan with the services that fit your business’s needs. For instance, some plans include employee onboarding, workers’ compensation support, payroll processing, and risk and compliance management. PEOs can offer one-size-fits-all solutions or tailored solutions based either on your industry or your company’s size.

Additional Fees

Throughout the research and sign-up process, be on the lookout for any additional fees you’ll have to pay. Many PEOs don’t mention additional fees until it’s time to sign the paperwork. Before you sign up, request a detailed breakdown of all pricing and fees in writing, and review line by line where your money will go. If a PEO service is not willing to provide this information, consider it a red flag.

TipTip

PEOs provide not only payroll processing and HR support but also benefits administration. Keep in mind that a PEO service’s fees do not include the actual cost of the benefits you provide your employees. The cost of benefits administration is usually added to your monthly or yearly fee.

Employee Minimums

Some PEOs require you to have a certain number of employees in order to use their services. This minimum is usually five employees. For many businesses, this is a nonissue, but if you run a very small or new company, your options for PEO support will be limited.

PEO Features

While PEO service offerings vary and individual providers may specialize or stand out in specific areas of HR, these are the key features that you will typically find in a well-rounded PEO service.

HR AdministrationPEOs can help small businesses offload day-to-day administrative HR duties such as managing employee paperwork.
Payroll ProcessingPEOs provide digital payroll processing tools and expert guidance from payroll experts.
Risk and CompliancePEOs often provide risk management tools built into their tech platforms alongside expert compliance support.
Employee BenefitsWorking with a PEO is a great way for companies to offer Fortune 500-level benefits not typically accessible to small businesses.
Workplace Training and Employee DevelopmentDevelop your workforce through performance management tools, online training, and expert guidance from PEO providers.

HR Administration

The primary function of a PEO is to take care of human resources so that business owners can focus on other duties. PEOs can provide as much or as little HR assistance as you need. They can manage HR tasks such as employee handbook and policy creation, employee onboarding and termination, unemployment assistance, and compliance reporting. Their features are typically accessible through intuitive online platforms and mobile-friendly applications. PEO platforms make it easy to access all of your HR functions in one place.

Payroll Processing

One major function of most PEOs is payroll processing. Since your employees are on the PEO’s books, the PEO tracks their time and attendance, including hours worked, paid time off, sick time and vacation days. The PEO not only tracks employee time and attendance but also helps to prepare and issue their paychecks. It can also process employee liens and garnishments if necessary.

Many PEOs also manage and report your quarterly and year-end state and federal deposits and filings. A PEO taking care of your payroll can save you a lot of time and money. A reputable PEO will always pay your employees accurately and on time, which could improve your company culture if payroll has been hard to manage in-house.

Justworks payments

We like that PEOs like Justworks make it easy to manage worker payments. Source: Justworks

Risk and Compliance

PEOs are usually well versed in the laws and regulations that your company has to follow, so they can help you manage risk and legal compliance for your business. This service is especially beneficial if you operate in multiple states or regions with varying employment laws. PEOs can help your business comply with the Affordable Care Act (ACA), the Health Insurance Portability and Accountability Act (HIPAA), and the Occupational Safety and Health Administration (OSHA). In some cases, they can conduct employee accident investigations and perform onsite safety inspections and job hazard analysis.

Employee Benefits

Since PEOs have so many employees on their books, they have access to affordable, desirable employee benefits, including medical, dental, vision and life insurance. Some even offer health savings accounts, flexible spending accounts and health reimbursement arrangements. They often provide long- and short-term disability insurance, employee assistance programs, and retirement options like 401(k) plans. Many PEOs offer a wide selection of fringe benefits too, such as commuter reimbursement programs and parking discounts.

Did You Know?Did you know

Some PEOs also help educate your employees about their benefits, whether that’s deciding between an HSA vs. FSA, allocating retirement funds, or choosing healthcare benefits.

Workplace Training and Employee Development

Most PEOs offer standard workplace training on topics like sexual harassment and discrimination. Many of them provide additional onsite and virtual training on leadership, communication, workplace technology, recruitment, disciplinary actions and social media. Some even offer industry-specific training. This access to employee training and development materials can help your team grow and advance their skills. PEOs that offer training and development often have an online platform to track and report employee course results.

Choosing a PEO

Finding a PEO is not as difficult as you may think. The first step of any business purchase decision is to assess your business’s needs so you can find companies that can help you solve those problems. Once you compare your top choices’ pricing, features and contracts, you should be able to decide which one is best for your business.

We interviewed some small business owners and managers to better understand what the decision process is like for SMBs interested in partnering with a PEO. While your buying decisions will be unique to your company’s needs, here are a few basic steps to finding the right PEO for your company.

1. Reviewing the Technology

When Max Prokell, founder of Venta Marketing, was choosing a PEO for his marketing team of 15 employees, he looked for one with a seamless user experience and dedicated HR support.

“The first sign of a great PEO comes down to their technology and the implementation of a great user experience,” he said. “Any PEO could have the most advanced platform on the market, but if my employees hate the interface, then the technology loses its value. We selected [TriNet] because I knew that my employees would appreciate their technology and a mobile-first approach to HR services.”

2. Researching User Experience

Read customer reviews to find out more about the experience of current customers. This is an important step because PEOs are much more than a software service — they are your co-employer. You can demo the software, but to get a clear picture of whether they’ll be a good partner for your business and employees, you’ll want to dive into customer reviews.

Aaron Bailey, CEO of Inbox Insight and former COO of business.com, placed high importance on user experience and customer support. When he needed a PEO for his team of 80 employees, he chose Insperity.

Insperity’s “user experience was better than its competitors’, the training and development options were very good, and their mobile app was very easy to use and had frequent improvements to it,” Bailey said.

3. Considering Your Business’s Industry

Since every small business is unique, a PEO should be able to customize its HR features to fit your needs. Some PEOs specialize in certain industries or business sizes, which can be beneficial for companies that don’t want a standard one-size-fits-all PEO approach.

Anh Trinh, founder of media startup GeekWithLaptop, said he selected Oasis for his team of eight employees because it is a reliable PEO that specializes in small businesses and startups. Trinh’s parting advice to his fellow small business owners is to identify the PEO features your business needs first and choose a PEO specializing in those areas.

4. Reviewing Accreditations and Narrowing Down Your Options

Check with the major accreditation agencies when you’re considering PEOs. While PEO companies do not need accreditation to provide good service, the credential is a good way to help you narrow down your options if you have several contenders. Accreditation will verify some major aspects of the PEO’s overall service offering.

A few of our best picks aren’t accredited but still provide great service, so your decision depends on what you value as a business owner.

5. Obtaining Pricing Quotes

One challenge that comes with shopping for PEO services is that many of the top providers do not provide transparent, publicly available pricing information. Therefore, once you’ve narrowed down your options a bit, you’ll need to request custom quotes from the PEO vendors that you are considering.

6. Choosing Your PEO

Once you’re armed with all the information on your candidates, choose the PEO that best meets your company’s needs. After you determine the plan and features your company will best benefit from, discuss any additional costs or fees with your chosen PEO’s sales representatives before you commit.

Advantages of PEOs

mpetitive benefits like these make you more desirable as an employer so you can attract and retain top talent.

Offloading Administrative Tasks

Another appealing quality of PEOs is their reputable administrative services, which are particularly helpful for small business owners who already wear many hats and don’t have time for all the necessary paperwork. Since PEOs are experienced in managing HR and administrative tasks, you’re free to focus on other aspects of your business and rest assured that your employees are properly managed and supported.

Expert Compliance Support

Navigating business laws, regulations and other compliance issues requires expertise that many business owners, particularly new startup founders do not possess. A small compliance mistake can have big repercussions. Partnering with a PEO allows businesses to work with compliance experts who stay up-to-date on all of the changing employment and payroll laws and requirements to avoid any costly mishaps.

Key TakeawayKey takeaway

The National Association of Professional Employer Organizations (NAPEO) found that SMBs grow at a faster rate and are half as likely to go out of business if they partner with a PEO.

Support with Domestic and International Expansions

Global expansion is no longer reserved for large enterprise businesses. Many small businesses hire across multiple states or even multiple countries to find talent that best fits their needs. PEOs can help small businesses register in new states or countries and manage local compliance and payroll requirements. International PEOs can also help with immigration and visa processes if needed.

Access to Comprehensive HR Technology

PEO services also provide access to the provider’s HR technology platform. This typically includes the key tools that you would expect to find in an HR software service, including reporting tools. Many PEO tech platforms include performance management tools, digital onboarding workflows and document management capabilities. Some PEO platforms are more tech-forward than others, but all of the services that we reviewed offered some HR technology tools to PEO customers.

Papaya Global analytics

Many PEOs, like Papaya Global, offer comprehensive analytics to help you make educated business decisions. Source: Papaya Global

Alternatives to Consider

While the PEO services mentioned above are our top picks, there are many other great HR providers on the market. If none of the choices above are the right fit for you, consider these other top-rated options.

Paychex PEO

Paychex is a professional employer organization with strong digital onboarding and employee self-service tools. Paychex PEO includes personalized payroll, benefits and onboarding support from Paychex’s HR experts and mobile-friendly, cloud-based HR software tools. Paychex’s seamless digital onboarding experience – complete with editable online forms and e-signature capabilities – makes it an excellent option for employers onboarding remote team members or simply looking to provide a more seamless onboarding experience. Read our review on Paychex to learn more.

AlphaStaff

AlphaStaff is a PEO service that provides full-service recruiting support along with traditional PEO hiring services such as onboarding support, hiring guidance and compliance expertise. Many PEO providers provide limited recruiting capabilities, but AlphaStaff provides an expansive range of technology and expert recruiting support to help employers find the right hire. Additionally, AlphaStaff offers other essential HR functions like compliance support, payroll processing, and employee benefits management. AlphaStaff stands out for its robust support and guidance, ensuring businesses receive tailored solutions for their evolving needs. Read our review on AlphaStaff to learn more.

PEO Trends in 2024

The PEO industry has experienced a high level of growth in recent years, and it does not appear to be slowing down in 2024. The PEO industry was valued at $59.62 billion in 2022 and is expected to reach a valuation of over $152 billion by 2031. With a compounded annual growth rate (CAGR) of 11 percent, the industry is projected to grow quite significantly each year until at least 2031.

One trend we’ve already seen in 2023 is the expansion of international capabilities among standard PEO providers. International PEO solutions such as Deel and Papaya Global continue to provide robust international PEO services, but even domestic players like Rippling and Gusto are expanding international payment support within their HR software and PEO services.

Another trend that we believe will continue is the use of artificial intelligence (AI) in HR management. AI quickly became a hot topic in 2023, and as technology evolves, we can expect to see it used in more HR platforms, like PEOs, to help further automate many HR functions for companies.

PEO FAQs

Small to midsize businesses in nearly any industry can benefit from partnering with a PEO. PEOs tend to be most helpful for businesses that do not have internal HR departments, which renders these organizations unnecessary for many larger businesses. Businesses looking to expand globally often need PEOs to manage international HR as well.

The best PEO service providers manage and maintain as many or as few HR functions as you need, including HR administration, payroll processing, workers’ compensation, employee benefits management, risk and compliance management, or training and development.

PEOs are experts in legal compliance for your state and industry, so they can reduce your company’s risk of lawsuits. Many PEOs provide online portals that allow employers and employees to access their benefits and HR self-service easily, but the best companies also offer mobile apps and one-on-one customer service. The best PEOs also tend to be accredited by the ESAC, IRS and BBB.

There are a few potential downsides to consider before you employ a PEO service. For example, since a PEO acts as a co-employer over your staff, it could become an outside influence on your company culture. Some business owners want to maintain control over their organization’s culture without the involvement of a co-employer.

Another potential negative is a perceived lack of security. When a PEO manages your payroll and taxes, it has access to sensitive company information and employees’ personal data. This makes some employers or their staff uneasy about security. The best PEOs implement strict security measures, so it is important to partner with a reputable, accredited company.

The biggest difference between PEOs and administrative services organizations (ASOs) is that PEOs operate under a co-employment relationship and ASOs do not. ASOs tend to be more flexible than PEOs as well; a business can partner with an ASO to receive assistance with as few or as many HR services as they need, whereas PEOs typically provide bundled HR services.

Since ASOs do not operate under a co-employment model, they don’t provide employee benefits or workers’ compensation coverage. However, they can put you in touch with brokers for those services.

The most significant difference between a PEO and an HR outsourcing (HRO) service is that a PEO operates under a co-employment relationship, and an HRO does not. Additionally, PEOs are typically a one-stop shop, meaning they bundle all their services together as one offering. Conversely, HROs tend to offer you the flexibility to choose which specific services you want to outsource.

As a result, PEOs are geared towards smaller businesses that need comprehensive HR assistance, and HROs are better for larger organizations or businesses that only need to outsource one (or many) HR services.

Implementing a PEO service in your business takes three to six weeks, with an average transition time of four weeks (which starts at the beginning of your payroll cycle). During the implementation process, the PEO works with your company to ensure it has all the proper employment details for each team member.

PEOs can help small businesses manage a variety of HR functions, including recruitment. Instead of wading through stacks of job applications, you can lean on your PEO throughout the process. PEOs employ knowledgeable HR professionals with the necessary experience and resources to find and recruit top talent for your company.

They also understand the current employment and labor laws that impact recruitment and hiring, so you can rest easy knowing that your business will maintain legal compliance throughout the process. Additionally, since you’ll gain access to great employee benefits with PEOs, you can promote comprehensive benefits packages to attract top talent.

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Kaylyn McKenna, Business Operations Insider and Senior Analyst
For more than 10 years, Kaylyn McKenna has studied the ins and outs of the workplace experience. With guidance designed to help both employers and employees, she advises on workplace matters affecting small businesses. This has ranged from providing recommendations on HRO and PEO services to sharing pointers on job interviews and managing increasing workloads. Her expertise has been trusted by JobGet, Business Management Daily and others. McKenna holds a bachelor's degree in business administration. While pursuing her master's in industrial and organizational psychology, she focused on relevant topics like organizational change, high-performance teamwork and customer relations. McKennna has also led webinars on workplace happiness and unconscious bias in the workplace. With her additional interest in e-commerce and finance, McKenna's work has appeared in Forbes, CBS News and Accounting.com.
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