business.com receives compensation from some of the companies listed on this page. Advertising Disclosure
BDC Hamburger Icon

MENU

Close
BDC Logo
Search Icon
Updated May 23, 2024

The Best PEO Service Providers of 2024

PEO services from ADP, TriNet and more can relieve your HR burden by managing onboarding, employee benefits and payroll.

author image
Skye Schooley, Senior Lead Analyst & Expert on Business Operations
Verified CheckEditor Verified
Verified Check
Editor Verified
Close
A business.com editor verified this analysis to ensure it meets our standards for accuracy, expertise and integrity.
Best PEO for Industry-Specific Needs
TriNet PEO Services
Trinet logo
  • Custom pricing
  • Contacts vary based on need
  • Accreditation: ESAC and IRS
USALinks to TriNet PEO Services
Visit Site
  • Custom pricing
  • Contacts vary based on need
  • Accreditation: ESAC and IRS
Best for Ease of Use
Justworks PEO
  • Starts at $59/employee per month
  • Monthly & annual contracts
  • Accreditation: ESAC and IRS
USALinks to Justworks PEO
Visit Site
  • Starts at $59/employee per month
  • Monthly & annual contracts
  • Accreditation: ESAC and IRS
Best for Global Payments
Deel PEO Services
Deel logo
  • Custom pricing
  • Monthly contracts
  • No ESAC, IRS or BBB accreditation
USALinks to Deel PEO Services
Visit Site
  • Custom pricing
  • Monthly contracts
  • No ESAC, IRS or BBB accreditation
Best for Benefits Administration
ADP TotalSource
ADP logo
  • Pricing by custom quote
  • Monthly, annual & multiyear contracts
  • Accreditation: ESAC, IRS and BBB
USALinks to ADP TotalSource
Visit Site
  • Pricing by custom quote
  • Monthly, annual & multiyear contracts
  • Accreditation: ESAC, IRS and BBB
Best for SMBs
Insperity PEO Services
  • Custom pricing
  • Annual & multiyear contracts
  • Accreditation: ESAC, IRS and BBB
USALinks to Insperity PEO Services
Visit Site
  • Custom pricing
  • Annual & multiyear contracts
  • Accreditation: ESAC, IRS and BBB

Table of Contents

Open row

When evaluating PEO service providers, we examined whether vendors were accredited by the Employer Services Assurance Corporation (ESAC) and IRS. We studied the HR services offered (such as payroll and benefits administration, legal compliance assistance and employee training) and whether employers had to purchase preset packages or could customize plans and bundle features as needed. We also compared pricing structures, contract terms and minimum employee requirements.

At business.com, our software analysts conduct hands-on testing to identify the best products on the market and vet vendor claims. We incorporate both general criteria, such as pricing and ease of use, in addition to evaluating services based on industry-specific features.  These factors inform our overall product ratings, which are verified by a business.com editor for accuracy and fairness. Learn more about our methodology and editorial process.

If your small business struggles to manage HR processes efficiently, it may be time to seek an outsourced solution to support your business, such as a professional employer organization (PEO). Small companies needing full HR support benefit from a PEO, as it provides full-service HR functions like employee onboarding, benefits administration, payroll processing and tax filing, reporting, and compliance assistance. PEOs differ from traditional human resources outsourcing (HRO) services because of the co-employment model: The PEO absorbs your employees legally to leverage large numbers in benefits markets to obtain competitive pricing.

The best PEOs provide all the HR-related services you need, including guidance that a small business without a full-time HR team needs. They do this while ensuring employees can get their HR-related questions answered. To help you find the best PEO for your business, we spent dozens of hours researching and testing the top vendors. Then we evaluated each service on, among other factors, its price, features, usability and customer support.

What Is a Professional Employer Organization (PEO)?

A PEO is a company that can take care of HR responsibilities, primarily for small and midsize companies. PEOs have drawbacks, but they can manage HR functions, like employee training and development, risk and compliance, workers’ compensation, payroll and benefits. Some PEOs bundle these services in a preset package; others offer customizable plans with a la carte features. When you partner with a PEO, you enter a co-employment agreement, which means the PEO is the legal employer of record (EOR) for your employees.

Tip Bulb

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

evaluated

9

researched

7

chosen

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

60

evaluated

9

researched

7

chosen

Compare Our Best Picks

BDC Ribbon
Our Top Picks for 2024
TriNet PEO Services
Justworks PEO
Deel PEO Services
ADP TotalSource
Insperity PEO Services
Rippling PEO Services
Papaya Global PEO
Rating (Out of 10)9.69.69.09.49.69.39.0
Best for

Industry-Specific Needs

Ease of Use

Global Payments

Benefits Administration

SMBs

Scalability

International PEO

ESAC or IRS certified

Both

Both

None

Both

Both

None

None

Contract length

Varies based on customer’s needs

Monthly or annual

Monthly

None

Annual or multiple years

Monthly

Annual or multiple years

Minimum no. of employees supported

5

2

1

5

5

5

1

Customer support

Varies based on customer’s needs

Account manager, live chat, phone and email

Dedicated CSM and 24/7 chat in-app

A dedicated team of experts and a payroll specialist

Phone and email (A client liason, HR specialist, payroll specialist, benefits specialist, HR services manager, performance specialist, safety consultant)

Phone, email, chat

Phone, email, chat

Review Link
Scroll Table

Our Reviews

Trinet logo
  • Base Price: Custom quote
  • Top Features: Flexible pricing options; custom, industry-specific plans; specialized HR support professionals; PEO and non-PEO options
  • Trial Period: None
Editor's Rating: 9.6/10
Visit Site

Why TriNet PEO is Best for Industry-Specific Needs

TriNet offers industry-specific PEO plans, so your business can receive specialized attention based on your particular business environment. This isn’t something we saw many competitors offer. We like that TriNet PEO offers essential HR services that every business needs, like risk management, document management, payroll processing, compensation benchmarking and benefits administration. TriNet also offers custom dashboards with pre-built key performance indicators (KPIs) and visualizations so you can gain insight into the HR trends that matter to your business and industry. What’s more, multi-company reporting access allows you to generate consolidated reports from multiple related entities simultaneously. We found this especially useful for those in an industry where multiple locations are common.

TriNet custom reports

We were impressed that TriNet offers custom reports, as well as more than 100 pre-built reports. Source: TriNet

TriNet Pricing & Services

Plan Key Services Add-On Services Price
TriNet HR Platform (Essentials) Automated onboarding, employee management, time off tracking, scheduling, integrations, analytics dashboard and mobile app Payroll tax compliance manager, payroll manager, HR manager, payroll tax compliance audit, HR operations audit $8 per employee per month (billed annually)
TriNet HR Platform (Growth) Everything in Essentials, plus configurable people analytics, compensation management and performance management Payroll tax compliance manager, payroll manager, HR manager, payroll tax compliance audit, HR operations audit $16 per employee per month (billed annually)
TriNet HR Platform (Zen) Everything in Growth, plus payroll, employee engagement surveys and a people hub Payroll tax compliance manager, payroll manager, HR manager, payroll tax compliance audit, HR operations audit $27 per employee per month (billed annually)
TriNet PEO TriNet technology platform, administrative HR services, payroll, benefits administration, risk mitigation and employee training and development Global payments, contractor payments Custom quote

TriNet PEO Advantages

  • TriNet users can customize their permission settings to give employees tailored access to workforce data.
  • It offers several valuable online resources, including its Connect 360 services, which put you in touch with specialized HR support professionals who can answer your industry-specific questions.
  • The technology is intuitive, user-friendly and platform-responsive, making it easy to access across various devices.

TriNet PEO Disadvantages

  • TriNet doesn’t support clients that operate in hazardous industries, like heavy construction and oil drilling.
  • It doesn’t list PEO pricing online, which can deter users who want to quickly identify PEOs within their budget.
  • It has a five-employee minimum for PEO plans.

TriNet User Score

TriNet PEO received a 7.1/10 rating from users who reviewed the platform on TrustRadius. Customers praised the platform’s implementation, employee onboarding and training, scalability and overall value. However, some users have found customer support to be somewhat difficult to contact. This drawback might be avoided by accessing TriNet’s Connect 360 services.

CHECK OUT OUR FULL TRINET REVIEW

  • Base Price: $59 per employee per month
  • Top Features: Simple user interface, quick implementation
  • Trial Period: None
Editor's Rating: 9.6/10
Visit Site

Why Justworks is Best for Ease of Use

With Justworks, entrepreneurs and their teams can access comprehensive benefit offerings, time tracking, automated payroll, compliance support and valuable HR tools, all in one place. We like that the company’s automated payroll services handle all benefits and tax withholdings for you, simplifying this process for small business owners. If you opt-in for Justworks Time Tracking, the platform automatically integrates employee hours and time off into your payroll process as well, reducing the need for manual time and attendance tracking. What separates Justworks from other PEOs we reviewed is its intuitive cloud-based platform, which can also be used on mobile devices. The platform is straightforward, but if you need assistance, the company provides designated support agents to help your team learn and use the new system.

Justworks Timecards

When we tested the Justworks platform, we liked how clean and user-friendly its design was. Source: Justworks 

Justworks Pricing & Services

Plan Key Services Add-on Services Pricing
Payroll Payroll, basic HR tools, expert support Time tracking $50/month base fee, plus $8 per employee per month
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 Time tracking, international contractor payments, employer of record $59 per employee per month ($49 per employee per 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 Time tracking, international contractor payments, employer of record $99 per employee per month ($89 per employee per month after 50+ employees)

Justworks Advantages

  • Justworks’ cloud-hosted platform is simple to access and navigate.
  • It is one of the few PEOs that list pricing online, making it easy to know whether the services fit your budget.
  • Users can pay international employees and contractors with Justworks’ add-on features.

Justworks Disadvantages

  • Justworks does not offer industry-specific plans.
  • The platform is not meant to support larger businesses with more than 500 employees.
  • Justworks doesn’t support some high-risk industries like heavy construction.

Justworks User Score

Justworks received a 4.3/5 rating from users who reviewed the platform on Trustpilot and a 7.8/10 rating from Justworks users on TrustRadius. Customers praised the platform’s user-friendly onboarding, intuitive user interface and helpful customer service. However, some users noted reporting limitations.

CHECK OUT OUR FULL JUSTWORKS REVIEW

Deel logo
  • Base Price: Custom quote
  • Top Features: Global payroll in 150+ countries, 120+ pay currencies, 200+ legal experts, localized benefits and support
  • Trial Period: Free HR plan
Editor's Rating: 9/10
Visit Site

Why Deel is Best for Global Payments

Deel offers global PEO/EOR services, enabling employers to hire and pay employees and contractors across more than 150 countries and jurisdictions – even in countries where they don’t own an entity. This is more than what most competitors offer. We like that Deel’s centralized platform allows businesses to view and manage payroll across multiple countries simultaneously. It provides useful payment features, like competitive salary insights, automated invoicing and payments, localized payroll and employee benefits, multiple currency pay options, and tax filing and payments. If you have questions or concerns about your payment obligations in a specific country, Deel can assist you, thus ensuring that you fulfill your legal obligations. With its localized support, customizable dashboard, centralized payment capabilities and various payroll reports, Deel is our choice for the best PEO for global payments.

Deel payment methods

We like that users can choose from multiple payment methods to pay their workers with Deel. Source: Deel

Deel Pricing & Services

Plan Key Services Price
Deel EOR Local payroll, benefits, taxes, and compliance; employee benefits; support from 200+ local HR and legal experts, IR protection, integrations Starting at $599 per month
Deel Contractor Management Locally compliant contracts and guidance on local laws; auto collect local tax agreements, payroll (with 10+ methods in 150 currencies); automated invoicing, expenses, time off, etc. Starting at $49 per month
Deel Payroll Onboarding, offboarding, payroll, government declarations, taxes, benefits, payslips, compliance assistance, global payroll reports Custom quote
Deel HR Custom documents, expense and time off management, data storage, people directory, HR reports, org charts, workflow automation Free
Deel Immigration Visas sponsorship (in 25 countries), application tracking, support from local immigration experts, ongoing visa support Custom quote

Deel Advantages

  • Deel lets you hire and pay employees and contractors in countries where you don’t own an entity.
  • The company offers localized contracts, benefits and support to help you stay compliant in multiple countries.
  • It has a Compliance Hub that tracks regulatory changes across hundreds of countries and provides monthly reports to flag potential compliance issues like expiring visas, misclassified workers and minimum wage violations.

Deel Disadvantages

  • Deel isn’t accredited by the BBB or the ESAC.
  • Its performance management features are limited, compared to other vendors we reviewed.
  • Some users claimed to have experienced minor bugs with the platform; however, most admit they were promptly resolved after contacting customer support.

Deel User Score

Deel received a 4.8/5 rating from users who reviewed the platform on Trustpilot and a 6.5/10 rating from Deel users on TrustRadius. Customers praised the platform’s global contract management and payroll features and the responsiveness of the customer service representatives. However, some users noted minor limitations, such as wanting a clearer understanding of total fees.

CHECK OUT OUR FULL DEEL REVIEW

ADP logo
  • Base Price: Custom quote
  • Top Features: Fortune-500-level benefits, online benefit enrollment, employee self-service, PEO and non-PEO plans
  • Trial Period: None
Editor's Rating: 9.4/10
Visit Site

Why ADP TotalSource is Best for Benefits Administration

ADP TotalSource offers all the services you are likely looking for in a PEO, including new-hire onboarding, employee retirement plans, work-life assistance programs and full-service payroll. However, when we tested the platform, one feature that stood out to us was its employee benefits administration. Employers can access Fortune 500-level benefits, a variety of flexible service plans and add-ons, an intuitive user platform, and seamless online benefits enrollment. While the company’s benefits administration is a highlight, ADP also offers dedicated specialists to help you navigate tricky HR issues, including benefits enrollment.

ADP benefits enrollment

We found ADP’s benefits enrollment process to be user-friendly. Source: ADP

ADP TotalSource Pricing & Services

Plan Key Services Pricing
ADP TotalSource ADP Workforce Now technology suite, employee onboarding, document management, employee benefits administration, payroll, reporting, compliance assistance, online learning courses, workers’ comp and claims management, unemployment claims administration, and a team of dedicated support representatives with full-service implementation Custom quote
Popular Add-ons Enhanced talent suite (recruitment, performance and compensation management; succession planning, talent strategic support), full-service recruitment and resume search service, employee engagement and leadership training, time tracking and scheduling, ADP Marketplace with custom API integrations Custom quote

ADP Advantages

  • ADP is a national company that has significant bargaining power with healthcare providers.
  • The platform has simple dashboards where you can view and modify your benefits.
  • ADP can automatically sync data between benefits carriers and the ADP platform, reducing the potential for human error.

ADP Disadvantages

  • ADP has a minimum employee requirement.
  • ADP does not list its pricing online, so you must contact a representative for a quote.
  • ADP TotalSource doesn’t offer a free trial.

ADP User Score

ADP TotalSource received a 6.1/10 rating from users who reviewed the platform on TrustRadius. Customers praised certain features, such as payroll processing and employee benefits administration. However, some users claim that the platform looks a bit dated and customer service is not as responsive as they would like.

CHECK OUT OUR FULL ADP TOTALSOURCE REVIEW

  • Base Price: Custom quote
  • Top Features: Extensive training resources, knowledgeable customer support, user-friendly platform, PEO and non-PEO plan options
  • Trial Period: None
Editor's Rating: 9.6/10
Visit Site

Why Insperity is Best for SMBs

Insperity’s HR services, risk management, payroll administration, employee benefit plans and easy-to-use platform make it an excellent option for small and midsize businesses. A standout feature of Insperity is its employee training solutions. For example, we like that Insperity partners have access to thousands of online books and resources, and you can even set up on-site or online training sessions tailored to your business’s needs. When testing the platform, we were pleased to see that employees can access Insperity’s cloud-based portal to clock in and out, check how much paid time off they have accrued, request time off and review their pay stubs. What’s more, Insperity provides extensive services without sacrificing personalized support. Businesses that partner with Insperity receive access to a dedicated support team for any questions or concerns.

Insperity dashboard

We found Insperity’s dashboard to be relatively user-friendly and easy to navigate. Source: Insperity

Insperity Pricing & Services

Plan Key Services Pricing
PEO for Small Business HR administration, employee benefits, payroll, compliance assistance, personalized HR support, all-in-one HR technology Custom quote
PEO for Middle Market Business HR administration, employee benefits, payroll, compliance assistance, risk mitigation, HR support and consulting, advanced workforce technology and analytics Custom quote
HCM + HR Technology Suite HR administration, employee benefits, payroll, compliance tools and support, workforce management technology, as-needed support from an HR service team Custom quote

Insperity Advantages

  • Insperity offers training and development materials, including hundreds of online books and courses.
  • The platform lets you track attendance, request time off and view compensation details, among other things.
  • Insperity offers dedicated support specialists.

Insperity Disadvantages

  • To partner with Insperity, businesses must have at least five employees.
  • The vendor doesn’t list pricing online.
  • PEO clients are not able to use third-party payroll solutions.

Insperity User Score

Users who reviewed Insperity on TrustRadius rated it 4.4 out of 10. Customers appreciate how user-friendly the platform’s onboarding process is. However, some users mentioned its pricing as a drawback.

CHECK OUT OUR FULL INSPERITY REVIEW

  • Base Price: $8 per employee per month
  • Top Features: Cloud-based platform, workflow automation, 500+ integrations, app and device management, user permission settings
  • Trial Period: None
Editor's Rating: 9.3/10
Visit Site

Why Rippling PEO is Best for Scalability

As a growing small business, it can be challenging to pick solutions that can scale to meet your needs. Rippling is one of the most scalable and intuitive platforms of any PEO we tested and reviewed. One of the advantages of Rippling is the support it provides for decentralized companies as they scale. These employees often need different access levels to specific software features, and Rippling allows you to customize those. For example, you can configure employee access to the applicable PTO system based on their region. We also found that Rippling excels as a scalable platform for new and growing businesses by providing local tax registration, scalable employee benefits, remote inventory management tools and workflow automation capabilities. With several automation features and the ability to easily scale between its stand-alone HR platform and a PEO model, Rippling is our choice for the best scalable PEO for small businesses.

Rippling headcount

We like that Rippling has features like headcount planning to help you monitor your workforce as you scale larger.  Source: Rippling

Rippling Pricing & Services

Plan Key Services Starting Price
Rippling Unity* Workforce directory, HR workflows, global workforce analytics, policy management, onboarding and offboarding automation, permissions and approvals management, admin and field privileges, document management, compensation bands, Compliance 360 and vacation and leave management $8 per user, per month
Rippling PEO Services PEO services like automated state unemployment tax registration, access to large group health plans,  live one-on-one healthcare guidance, access to PHR-certified HR advisors, and access to mandatory anti-harassment trainings for employees Custom quote
Other Add-on Services US and global payroll; time and attendance; benefits administration; HSA, FSA and commuter benefits; ACA and COBRA administration; recruiting; learning management; headcount planning; performance management; pulse surveys; HR Help Desk; ASO; global EOR services; app, device and inventory management; corporate cards; expense management; bill pay Custom quotes

*Rippling Unity is Rippling’s base plan that every user must purchase. There are four options to choose from. After that, you can add other Rippling features, like Rippling’s PEO services.

Rippling Advantages

  • Rippling’s cloud-hosted platform can serve businesses that have both in-office and remote employees.
  • The company provides local tax-compliance services, which is beneficial for businesses with employees located in multiple states.
  • Rippling offers HR and IT management features, allowing users to manage these functions from one centralized platform.

Rippling Disadvantages

  • Rippling is not accredited by the ESAC or the BBB.
  • Rippling doesn’t share pricing for most of its features online.
  • It has a five-employee minimum.

Rippling User Score

Rippling received a 4.6/5 rating from users who reviewed the platform on Trustpilot, and an 8.5/10 rating from Rippling customers on TrustRadius. Customers praised how user-friendly the platform is, including processes like benefits enrollment, employee self-service, and device management. However, some users noted that pricing may not be ideal for very small businesses.

CHECK OUT OUR FULL RIPPLING PEO REVIEW

  • Base Price: $15 per employee per month
  • Top Features: Global contractor and employee payments, centralized HR platform, localized payments and support
  • Trial Period: None
Editor's Rating: 9/10

Why Papaya Global is the Best International PEO

Papaya Global provides international businesses in more than 160 countries with PEO support and compliance, which is much greater than most competitors we reviewed. It stands out for its ability to serve employees across different locales. It’s one thing to support employees who are located in a single country, but if your workforce is dispersed across multiple international locations, there are several factors you must consider, such as making sure that all of your employees are paid appropriately and that their benefits are administered correctly. When we tested the platform, we found that Papaya can handle these responsibilities and more. For example, Papaya supports pay exchanges, so workers earn paychecks in their own currency, as well as provides talent acquisition and employee onboarding services.

Papaya Global analytics

Papaya Global provides one central location for global employers to manage their workforce. Source: Papaya Global

Papaya Global Pricing & Services
Plan* Key Services Starting Price
PayrollPlus Papaya workforce platform, payroll, support for 160+ countries, automated payments in local currency, workforce wallets, authority payments, fraud protection, analytics, user permissions, integrations, employee self-service, time and attendance, employee support, dedicated HR support $15 per employee per month
Employer of Record Automated onboarding, certified CPA firms, EOR payments, secured funds wallet, contract generator, employee portal, full liability coverage, local compliance guaranteed, 24/7 support, country knowledge base $599 per employee per month
Contractor Payments & Management Contractor payments, worker classification support, standardized invoices, automated recurrent invoicing, one-click approvals, bulk payments, payouts in 100+ currencies, reporting, automated payment reconciliation $30 per contractor per month
Global Workforce Payments Payroll wallets in 14 currencies, bulk payments, financial data connectors, split payroll payments, authority payments, account validation, fraud prevention, automated payment reconciliation, record-keeping and reporting $2.5 per transaction
Agent of Record Contractor classification and management, local compliance guaranteed, built-in payments, record-keeping, ongoing compliance checks, HR and legal support, full liability coverage, country knowledge base $200 per contractor per month

*If you sign up for more than one of these plans, you can manage all of your HR functions from one centralized Papaya Global platform.

Papaya Global Advantages

  • Papaya Global can support businesses in more than 160 countries.
  • The PEO provides local and global benefits.
  • The company supports all employee types, including full-time, part-time and contract-based workers.

Papaya Global Disadvantages

  • Papaya Global is more expensive than some domestic PEOs we reviewed.
  • It has not been accredited by the ESAC, IRS or BBB.
  • Papaya Global charges setup and onboarding fees.

Papaya Global User Score

Papaya Global received a 2.7/5 rating from users who reviewed the platform on Trustpilot, and a 9.1/10 rating on TrustRadius. Customers like that the platform acts as a central location for their HR data and workflows. However, some users noted issues with the pricing.

CHECK OUT OUR FULL PAPAYA GLOBAL REVIEW

How PEOs Price Their Services

PEOs offer two main pricing structures for small and midsize businesses: They charge either a per-employee fee (roughly $40 to $160 per month) or a percentage of your total monthly payroll (roughly 3% to 12%). There are advantages and disadvantages to both types of pricing. The best pricing model for your business depends on factors such as your business type, the number of employees you have and the PEO services you want.

PEOs typically do not offer free trials of their HR services, and contract lengths and structures vary by company. Some PEOs only offer long-term contracts, while others don’t require a contract at all. Cancellation policies also vary, but business owners typically need to provide at least 30 to 60 days’ notice before terminating their PEO service. Some companies allow you to leave at any time for any reason; others charge you a fee for leaving.

Below are other crucial items to address with the PEO service you’re considering. You should go over this information, even though it may be available on the company’s website, with a member of the PEO’s sales team to gain a complete understanding of the PEO’s services.

Plan Structure

One thing to pay attention to is how a PEO packages its services, like employee onboarding and development, insurance policies, workers’ compensation claims, payroll processing, risk and compliance management, and HR tasks. Some PEOs provide a one-size-fits-all solution, whereas others offer customizable services that you can add or remove to fit your small business’s needs. Both models have advantages and disadvantages. A bundled solution means you can grow into all of the features without changing the pay structure, while an a la carte option is more tailored to your business and can save you money if you need only a few services, such as payroll and health insurance.

Additional Fees

Inquire upfront about additional fees. For example, some companies charge a fee if you cancel service. Thoroughly review the materials the sales team gives you to spot any costs associated with service. If you’re not sure, ask the sales representative. Also, remember that the pricing model, whether it charges per employee or a percentage of income, does not include additional costs for healthcare and other employee benefits.

Employee Minimums

Many of the PEOs we evaluated require a minimum number of employees — usually five — to qualify for their services. (Another type of minimum you may see is a minimum monthly salary if your business is below a certain employee threshold.)

If you don’t qualify, many companies offer administrative services organization (ASO) or HR outsourcing services. While these services may be similar to the PEO model, they do not have co-employment agreements.

Make sure you understand what your PEO expects from you. You don’t want to have to cancel your service or pay an additional fee for falling below the PEO’s minimum requirements.

How do PEOs Work?

PEOs operate under a co-employment model, meaning your employees appear on the PEO’s “books” for legal and tax purposes. This allows PEOs to act as massive corporations with hundreds of thousands of employees. PEOs can negotiate contracts with employee benefits providers for more favorable rates on unemployment and workers’ compensation insurance. It also gives them the power and scope to build and leverage powerful time-tracking and payroll technology for small businesses.

When you sign on with a PEO, you’ll work closely with customer success managers (and other team members) to build the services you need for your small business. As your business grows, your PEO can adjust to meet your needs. Working with a PEO under the co-employment model essentially means that you’re partnering with a team of specialists to build out the administrative and back-end processes of your organization. If it makes sense for your business financially, these organizations can take a lot of the stress out of running your business so you can focus on more pressing needs.

Roughly 173,000 small and midsize businesses partner with PEOs to get high-quality benefits and proper HR support to help their businesses run smoothly. A PEO must adhere to both state and federal regulations, so some companies are divided by region or state.

Did You Know?Did you know
There are nearly 500 PEOs serving and operating in all 50 states.

As you search for a PEO, keep your state and region in mind; some PEOs are qualified to serve small businesses in certain states, whereas others have global partnerships. Most of the companies we reviewed are qualified to offer coverage in all 50 states. If you’re curious about whether a particular PEO operates in your state, you can look it up in the National Association of Professional Employer Organizations’ (NAPEO) directory.

What is a Professional Employer Organization or PEO?

Professional Employer Organization Features

PEOs provide several beneficial resources for small businesses. Because they focus on HR tasks and administration, you are left with more time to focus on your business. On top of that, PEOs can offer better benefits to your employees than you might be able to obtain on your own. This can help you attract and retain top talent. Many employer organizations use mobile applications and online portals for small businesses and employees to easily access important information, like payroll, benefits and training courses.

Although not every business will need every PEO feature available, here are some of the top PEO features that could help your business.

Administrative HR Services

One advantage of partnering with a PEO is having a professional organization take care of all your HR services. PEOs can create your employee handbook and policies, onboard new hires, cover HR administrative tasks, offer unemployment assistance, and help with compliance reporting and employee termination. They often have online HR reporting tools, employee self-service options and advanced HR technology.

Deel analytics

Workforce analytics help to streamline HR functions and inform business decisions. Source: Deel 

Employee Benefits

Because PEOs co-employ multiple businesses’ employees, they can offer better employee benefits than you might otherwise be able to provide. PEOs typically offer medical, dental, vision, life, and long- and short-term disability insurance. Some offer additional plans, like flexible spending accounts (FSAs), health savings accounts (HSAs) and health reimbursement arrangements (HRAs).

Employees often receive retirement plans, such as 401(k) plans, as well as additional benefits, like commuter and parking discounts, home and auto insurance discounts, and access to employee assistance programs. Many employers receive guidance on Affordable Care Act (ACA) compliance, while their employees get access to consulting services by licensed benefits professionals. The benefits vary by PEO, as does the cost.

Payroll

PEOs offer small businesses an affordable way to package all of their HR responsibilities, including payroll processing and taxes. PEOs can process your employee payroll, prepare and distribute payroll checks, administer direct deposits, and process employee liens and garnishments. PEOs take care of your employees’ paid time off, track their sick and vacation time, and prepare and distribute their W-2s.

Many PEOs offer quarterly and year-end state and federal tax deposits and filing, along with detailed management reports. The PEO you partner with should be able to handle all of your employee payroll needs. By including this cost in the PEO’s total, you can ultimately save money on your payroll.

Risk and Compliance

Managing risk and legal compliance is an important part of running a small business. However, if you work with a PEO, it can manage much of that for you. Depending on your business’s industry, this could be a great deal of work handled by someone else. The level of compliance and risk that a PEO manages varies, but many PEOs perform tasks such as managing ACA coordination and compliance, running on-site safety inspections, performing accident investigations and job hazard analyses, allocating workers’ compensation coverage, and maintaining OSHA compliance for your business.

A PEO ensures that your business takes the appropriate measures to maintain workplace safety. Some PEOs provide employment practices liability insurance (EPLI) coverage, safety and loss prevention programs, Health Insurance Portability and Accountability Act (HIPAA) compliance, and Consolidated Omnibus Budget Reconciliation Act (COBRA) insurance. There are several other compliance measures that PEOs can take to keep your employees safe and ensure that your business abides by legal employment guidelines. This alone is reason enough for some businesses to partner with a PEO.

Did You Know?Did you know
According to the NAPEO, companies that partner with a PEO grow 7 to 9 percent faster, and are 50 percent less likely to go out of business, than companies that don’t partner with a PEO.

Training and Development

Some PEOs offer employee training and development. Many provide online and on-site training courses that your employees can take to enhance their skills. They can access courses on communication, sexual harassment and discrimination, hiring and firing, disciplinary actions, leadership, social media and workplace technology, as well as get industry-specific training.

Not all PEOs provide continuing-education courses, and the courses that PEOs do offer vary. However, at the very least, most PEOs can train your staff on necessary workplace concepts, like avoiding workplace discrimination and sexual harassment.

Customer Support

Make sure the PEO you partner with assigns you a designated team of experts who can handle your HR, risk management, benefits and payroll needs. Work with a company that provides specialists in each area, along with a relationship manager who can help you take advantage of all of the services the PEO offers. Sometimes, the HR consultant doubles as a relationship manager, which is also a good option. The best companies have HR consultants who are certified by the Society for Human Resource Management (SHRM). SHRM certification ensures that your account coordinator is more than just a company relationship manager.

Justworks customer support

We appreciate PEOs that provide online resources and knowledgeable customer support. Source: Justworks

How to Choose a PEO

contact it. That way, you get a good understanding of the services the PEO offers, as well as the pricing and contract structures, before heading into the sales process.

Working with accredited agencies is always a good option, but accreditations are not the be-all and end-all of the PEO world. A few companies on our list that aren’t accredited are reputable. Here is a three-step guide for choosing a PEO that can seamlessly integrate with your company.

1. Define your business’s needs.

The first step in any buying decision is to understand exactly what your company needs. In the case of a PEO, are you looking for health benefits? COBRA administration? A seamless cloud-based platform to keep HR information organized? It’s also important to partner with an organization that can support your growth. That is one of the major advantages of working with a PEO: It can help your organization grow from an administrative perspective.

TipBottom line

When you’re choosing a PEO, consider your current and future needs. As your company changes and more people are brought on board, your PEO should be able to scale with you.

2. Make a short list of potential companies.

Our reviews are a great resource. Learn about the services offered by the PEOs on our list, and get familiar with their customer service and the implementation process. Any of our best picks would be a good option for your business. It’s your job to match your needs to the right company. This is especially true when it comes to pricing and contract structure. Focus on the size of your organization, your growth plans and whether a specific PEO structure would be the best for your business.

Once you’ve narrowed your options to two or three PEOs, you can start the next step in the process.

3. Contact PEOs, and make your decision.

Contact the sales teams of PEOs you’re interested in so you can get a specific picture of what your business partnership would look like. Ask about additional fees, estimated costs and other features. The sales process should be smooth and simple. If you have trouble, it could be an early indication of a partnership you shouldn’t pursue. Decide on the PEO that fits your business’s needs most closely, and work with a company that you can grow with as your business reaches the next level.

Additional Options Worth Exploring

If you still haven’t found what you’re looking for in our best picks, don’t worry – there’s more! Here are a couple of other worthy contenders worth exploring.

Paychex

Paychex is a national company that offers customizable plans and flexible pricing. We like that it supports a wide range of business types and sizes, regardless of whether your employees are in the office, at home or a mix of the two. Businesses that partner with Paychex can receive essential HR functions, like HR administration, payroll processing, expense management, employee benefits information and risk-management support. And as your business changes or expands to multiple states, you can add or remove services accordingly. Read our full review on Paychex PEO to learn more.

AlphaStaff

AlphaStaff is a flexible PEO that offers a wide variety of HR services and features with tailored plans and pricing. It offers essential HR services, including employee training and development, strategy and handbook creation, compliance assistance, termination assistance, payroll processing and tax filing, and employee benefits administration. One of our favorite aspects of AlphaStaff is its support and guidance. When you partner with AlphaStaff, the company can review your organization to develop strategies that match your current and growing needs. The PEO also offers benefit advisory services to help you through the process of administering benefits in an efficient and compliant manner. Check out our complete AlphaStaff review to learn more.

Professional Employer Organization FAQs

A wide range of businesses can benefit from partnering with a PEO. Although PEOs typically cater to small and midsize businesses, some can also serve large organizations. Some PEOs have an employee minimum — typically, two or five employees — meaning you must have at least that many employees to use their services.

While some PEOs focus on specific industries, most PEOs can benefit nearly every industry — for example, education, financial services, manufacturing, e-commerce, marketing and advertising, life sciences, media and entertainment, nonprofits, retail, and technology.

When small businesses offer competitive benefits to potential employees, they are in a better position to attract and retain top talent. This is where PEOs come in. A PEO allows you to offer your employees affordable health benefits with reputable health insurance companies, as well as additional benefits, such as supplemental insurance plans (e.g., FSA, HSA and HRA), employee perks (e.g., home and auto insurance discounts, parking and commuting benefits), and retirement savings accounts, like 401(k) plans.

Additionally, a PEO can help you maintain risk and legal compliance. This can reduce legal problems for your business, helping you earn a positive reputation in your community and reduce employee turnover. Because many employees seek an employer that can offer continued education, partnering with a PEO that provides training and development courses can entice top talent as well.

Although they seem similar, PEOs and staffing companies serve different HR needs. The primary benefit of a PEO is that it handles tedious and time-consuming HR tasks, such as administrative work, payroll, employee benefits, risk and compliance, and employee training and development.

A staffing company, on the other hand, primarily serves short-term or temporary employment needs. Staffing companies handle other HR-related tasks, such as payroll and unemployment taxes, but often with much higher fees for these services. Small businesses should consider partnering with a staffing company only if they need temporary staffing.

A PEO is an affordable HR option for many small businesses because it can handle all of your HR functions under a co-employment model. A PEO removes the burden of many HR tasks and assures small businesses that critical functions such as risk and compliance are being managed by HR experts.

HRO services can handle many of the same HR functions as a PEO can, but they operate as separate entities instead of forming an employer partnership. Businesses that use an HRO can choose the HR functions they need to outsource — for example, only payroll and employee benefits or a full-service HR suite. HR outsourcing is better for larger companies that need assistance only with specific HR tasks.

A PEO and an ASO both provide HR services, with one major difference: the employment relationship. PEOs use a co-employment model (meaning the PEO is the employer of record for employees). Under an ASO partnership, the ASO offers assistance with HR services while your organization remains the employer of record for your employees.

Another difference between PEOs and ASOs is the specific services they offer. Both PEOs and ASOs offer HR services, but ASOs do not provide workers’ compensation insurance or employee benefits programs like PEOs do. ASOs are also more flexible in the HR services you can outsource, whereas PEOs typically bundle services.

The best PEO service providers satisfy your HR needs, whether they are HR administration, employee benefits, payroll, workers’ comp, risk and compliance management, or training and development. They use the latest technology and mobile applications so that businesses and employees can easily access their information. Great providers offer HR expertise and customized, one-on-one assistance to help you navigate your PEO services, regardless of how long you’ve worked with them. The best PEO services are transparent, easy to communicate with, and accredited by the ESAC and the IRS.

When you partner with a PEO, that company is technically a co-employer of your staff. This can cost you some internal control over your team and processes, and possibly result in an outside influence on your company culture. Having an outside company manage your payroll and taxes might make you feel a lack of security as well. For these reasons, it is important to partner with a PEO you can trust. The right PEO can be a great asset to your company.

Transitioning your HR processes to a PEO is a big undertaking, but it can ultimately simplify your HR responsibilities. The average PEO transition takes roughly four weeks, starting at the beginning of a payroll cycle, but it could take anywhere from three to six weeks. During this implementation period, the PEO will work closely with your team to ensure that all of the proper paperwork is complete and successfully transitioned.

WHAT TO EXPECT IN 2024

The needs of employees have changed drastically over the past few years, which means employers must seek to partner with PEOs that are evolving to meet those needs. Because the PEO market is projected to grow exponentially over the next few years, employers can feel confident that top PEOs on the market are doing just that. Employers should expect to see advanced tools — such as employee self-service capabilities, AI integration, and legal compliance assistance — become staples of PEO offerings.

As many employees have remote and hybrid work arrangements, they need software to be accessible both inside and outside the office. PEOs offer extensive cloud-based technology platforms that are simple and easy for everyone to use from any location and device. This is essential for companies with different types of workers, especially for ensuring that sensitive HR-related information is properly secured.

The popularity of generative AI exploded in 2023, forcing many organizations and people to modify the way they operate. We expect the use of AI to continue and expand in 2024, making its way into HR solutions like PEOs. As the PEOs evolve, we anticipate seeing more automation features made available through AI technology.

By working with a PEO that’s up to date with technology, you can track flexible work hours and provide remote workers with a standardized, simple HR, payroll and benefits solution. This can go a long way for smaller companies that are looking to combat burnout among managers and employees alike, as many processes can be automated, especially from an HR perspective.

Although legal compliance has always been important, the shift to hybrid and remote work has made it even more vital. Many organizations are hiring international workers, revealing the need for global PEOs with expansive HR compliance knowledge. In the coming year, we expect more PEOs to expand their capabilities globally, helping companies navigate the various employment and labor laws across multiple cities, states and countries.

author image
Skye Schooley, Senior Lead Analyst & Expert on Business Operations
Skye Schooley is a dedicated business professional who is especially passionate about human resources and digital marketing. For more than a decade, she has helped clients navigate the employee recruitment and customer acquisition processes, ensuring small business owners have the knowledge they need to succeed and grow their companies. In recent years, Schooley has enjoyed evaluating and comparing HR software and other human resources solutions to help businesses find the tools and services that best suit their needs. With a degree in business communications, she excels at simplifying complicated subjects and interviewing business vendors and entrepreneurs to gain new insights. Her guidance spans various formats, including newsletters, long-form videos and YouTube Shorts, reflecting her commitment to providing valuable expertise in accessible ways.
BDC Logo

Get Weekly 5-Minute Business Advice

B. newsletter is your digest of bite-sized news, thought & brand leadership, and entertainment. All in one email.

Back to top