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Paychex PEO Review

Skye Schooley
Skye Schooley
Staff writer
Business News Daily Staff
Updated Aug 17, 2022
  • Paychex provides flexible contract and pricing options for small businesses, making it ideal for startups and other newer companies.
  • Paychex is a major HR outsourcing, payroll and PEO company, which means partnering businesses have access to a wide range of services.
  • Paychex provides tailored plans based on certain industries, making a flexible, custom PEO option for certain small businesses.
  • This review is for small business owners looking to learn more about the features, costs, and pros and cons of Paychex’s PEO services.

We recommend Paychex as the best professional employer organization (PEO) for startups. Paychex has flexible plans that allow startups (with at least five employees) to get exactly what they need from a PEO. One of the major challenges for startups is scaling to effectively meet the needs of your employees and to effectively (and smoothly) run your company. By partnering with a PEO like Paychex, you can take internal support for human resources, payroll administration and employee benefits off your plate. Because Paychex is a major PEO provider accredited by the IRS, the Employer Services Assurance Corporation (ESAC), and the Better Business Bureau (BBB), you can rest assured about the quality of services and benefits throughout your time with the company, regardless of your business’s size.

Paychex PEO Review

Paychex PEO

The Verdict

Paychex offers a flexible contract and pricing structure, as well as extensive online and onsite training resources ‒ it's our pick as the best PEO for startups.

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Paychex Pricing

You must have a minimum of five employees to be eligible for Paychex’s PEO services. You also will be asked to commit to Paychex for a full year; however, you can cancel at any time with a 30-day written notice. However, you may be subject to an erly termination fee if you do cancel early.

Paychex provides a bundled package of PEO services; you can mix and match additional services to tailor your own PEO solution. This is a major advantage for startups and growing companies that don’t want to commit resources to pay for services they will not use.

[Read Related: How to Find a Professional Employer Organization]

Ease of Use

One of the biggest advantages of partnering with Paychex is its ease of use. The company offers online demos, where new users can learn about the applicant tracking, employee onboarding, performance management, and time and attendance features. Its cloud-based platform and mobile app are both easy to access, so you and your employees can view payroll and HR information whether you are in the office or working remotely.

The Paychex platform has a well-organized, intuitive interface that is easy to navigate.

Here are some of the services Paychex can offer your small business:

  • Employee training
  • Employee termination assistance
  • HR consulting
  • Group health insurance plans
  • Employee assistance
  • Section 125 plans
  • Retirement plans
  • Automated benefits renewal
  • Automated benefits record keeping
  • Direct deposit for employees
  • Payroll tax administration
  • Online employee self-service
  • Wage garnishment features
  • OSHA compliance
  • Employee handbook creation
  • Form 5500 filing
  • Workers’ compensation insurance
  • New-hire reporting

TipTip: Rather than choosing a PEO bundle, which may include features your employees don’t need, paying for services a la carte, or individually, can be a smart, budget-friendly way to work with a PEO without committing to a long-term, expensive deal.

Paychex Features

Paychex is a great option for startups that want a PEO that understands their needs and can provide solutions specific to the industry the business is based in. Paychex specializes in PEO solutions for businesses working in architecture, banking, country clubs, financial services, franchises, hospitality, law, light manufacturing, property management and retail. It offers bundled services like HR administration, employee benefits, payroll, risk and compliance management, and employee training, with the option to add features, like master medical or workers’ compensation policies.

HR administration Paychex offers an extensive HR administration suite.
Employee benefits Paychex’s co-employment model provides small businesses access to health, dental, and vision insurance; 401(k) retirement plans; prepaid college savings plans; health savings accounts; flexible spending accounts; and an employee assistance program.
Payroll processing Paychex can process your payroll and handle your payroll tax needs.
Risk and compliance Paychex provides extensive risk and compliance features, including helping you develop safety programs and adhering to OSHA requirements.
Employee training and development With Paychex, you can offer your employees extensive training materials.
Paychex offers many timesaving, convenient services for business owners, and startups can compete with big businesses by providing benefits, like health insurance, that employees want.

HR Administration

Paychex can manage all of your administrative HR tasks; it can help you create an employee handbook, draft workplace policies, create job descriptions, recruit and onboard employees, handle new-hire reporting, advise you on return-to-work programs, and assist you with employee termination.

Employee Benefits

Paychex provides Fortune 500-level employee benefits, including health insurance, vision insurance, dental insurance, 401(k) retirement plans, prepaid college funds, HSAs and FSAs, commuter plans, employee assistance programs, and health and wellness coaching.

Payroll Processing

Paychex manages all of your payroll processing. You can choose your pay schedule and pay employees via direct deposit or pay cards. It also handles payroll tax compliance for you. Additionally, with Paychex’s software, you can track employee time and attendance and paid time off. 

Risk and Compliance

Paychex can help your business stay up to date with laws and regulations; it offers workers’ compensation insurance, safety training for your employees, OSHA and ACA guidance, and return-to-work programs. 

Employee Training and Development

Paychex provides one of the best training programs of any PEO we reviewed; it has online books, videos, and courses on professional development, soft skills, computer and technical skills, HR, workplace safety, and conflict management.

Key TakeawayKey takeaway: Paychex provides all of the key services businesses look for when partnering with a PEO, including top benefits, payroll processing, employee training, and risk and compliance.

PEO Setup

Setup begins with your Paychex HR representative. He or she will help you get set up in the software. Once set up is complete, you will have main points  of contact for all your HR, payroll and benefits-related services. These individuals can also put you in touch with other Paychex experts, should your business need more support.

Paychex makes it simple for employees to sign up for health insurance policies

Paychex is accredited by ESAC and the IRS. Paychex is also accredited by the BBB.

Customer Service

Paychex has a slightly different structure versus other PEOs regarding how you can reach the company’s experts. Rather than having designated representatives for each area of the PEO model – risk management, payroll, benefits administration, HR consulting – like Insperity offers, for example, Paychex provides you with two key people to help you with all areas of your account. You’ll work with an HR generalist and a payroll account manager to streamline your PEO services.


Paychex, like many other PEOs, requires you to have at least five employees to be eligible for its services. This is a common requirement among PEOs, but startups are less likely than other businesses to meet this requirement. If you have fewer than five employees, you will need to look for another PEO or wait until you hire more employees to sign up with Paychex.

Another downside is that Paychex doesn’t provide pricing information online. While this practice, too, is standard in the PEO industry, some providers, like Justworks, are more transparent with their pricing.


We recommend Paychex for:

  • Startups looking for immediate HR support
  • Business looking for industry-specific services
  • Businesses with at least five employees

We DON’T recommend Paychex for:

  • Businesses with fewer than five employees
  • Businesses that prefer separate contacts for their company’s HR services
Paychex PEO Review

Paychex PEO

The Verdict

Paychex offers a flexible contract and pricing structure, as well as extensive online and onsite training resources ‒ it's our pick as the best PEO for startups.

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Skye Schooley
Skye Schooley
Business News Daily Staff
Skye Schooley is a staff writer at and Business News Daily, where she has written more than 200 articles on B2B-focused topics including human resources operations, management leadership, and business technology. In addition to researching and analyzing products that help business owners launch and grow their business, Skye writes on topics aimed at building better professional culture, like protecting employee privacy, managing human capital, improving communication, and fostering workplace diversity and culture.