10 Best PEO Services

To come up with the best PEOs for small business, we considered 20 PEO services across hundreds of data points. Our editorial team narrowed down the list to the 10 best based on our methodology, which includes factors such as pricing, features, customer satisfaction and integrations. Each data point receives a weighted score, which is then totaled to determine the final ranking.

We also evaluated each PEO service on its own merits, taking into account factors such as payroll services, employee benefits, HR management features and compliance assistance. We also considered whether the PEO offers any additional features that would be beneficial for small businesses such as payroll funding or an employee assistance program.

Decision Factor	Scoring Weight	Description
Expert score	20%	Four factors are weighted equally to account for the score in this category: overall features, value, reputation/popularity and ease of use.
Benefits	19%	Seven specific benefits represent 2% each of the service’s overall score, and one (group discounts and perks) accounts for 1%. The quality of the benefits packages available to employees and how easy benefits are to administer each contribute 2% to the service’s overall score.
Risk and Compliance	16%	Regulatory compliance, workers’ compensation, unemployment insurance, OSHA compliance and safety audits each account for 3% of the service’s score, while safety training represents 1%.
Service and Support	15%	The factor weighted highest in this category is whether the company provides a dedicated account or customer service representative, which is 5% of the overall score. The availability of telephone and live chat each represents 3%, while email-based support is weighted at 2%. Finally, the availability of a knowledge base makes up 2% of the score in this category.
General Features	14%	Five features each represent 2% of the service’s score: recruiting and talent management, performance management, access to HR pros for guidance, an employee self-service portal and help with internal investigations. Employee training and development, help with strategic business planning, employee handbooks and employee onboarding are each 1% of the score.
Certifications	10%	The certifications given equal weight in this category are CPEO, Certified Payroll Professional (CPP), ESAC, Certified Employee Benefit Specialist (CEBS) and SHRM Certified Professional (SHRM-CP).
Payroll	6%	Payroll processing and tax compliance are each 2% of the service’s score, while flexible pay schedules and global payroll account for 1% each.

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Read more: How we test small business products

A PEO is a type of company that provides HR-related services to businesses, such as payroll, benefits and risk management. PEOs allow businesses to outsource these tasks and focus on their core operations.

PEOs are often used by small and medium-sized businesses that may not have the resources or expertise to manage these tasks in-house. They can help businesses save time and money by handling HR tasks efficiently and effectively and can also provide access to a wider range of benefits and resources than the business might be able to afford on its own, such as health insurance.

How Does a PEO Work?

PEOs work by entering into a co-employment relationship with the businesses they serve. This means that the PEO becomes the employer of record for tax and compliance purposes, while the business retains control over its day-to-day operations and decision making. The PEO handles HR tasks, such as payroll, benefits and workers’ compensation, and provides support and resources to help the business manage its employees.

PEO vs. HRO vs. ASO

PEO, HRO and ASO are all acronyms that refer to different services that businesses can use to outsource HR tasks. Which type of service is best for a particular business will depend on its needs and goals. PEOs can be a good choice for businesses that want a comprehensive solution that includes a wide range of HR-related services, as well as support and resources to help them manage their employees.

HRO and ASO may be more suitable for businesses that only need to outsource certain HR tasks or want more control over their HR functions. Ultimately, the best choice will depend on the specific needs and goals of the business.

PEO

A PEO is a company that provides a range of HR-related services to businesses, such as payroll, benefits and risk management. PEOs allow businesses to outsource these tasks and focus on their core operations. PEOs work by entering into a co-employment relationship with the businesses they serve, which means that the PEO becomes the employer of record for tax and compliance purposes while the business retains control over its day-to-day operations and decision making.

HR Outsourcing (HRO)

HRO is the practice of outsourcing HR tasks to a third-party provider. HRO can include a wide range of services, from payroll and benefits administration to recruiting and training. HRO providers rarely assume co-employment responsibilities and do not become the employer of record for tax and compliance purposes.

Administrative Services Only (ASO)

ASO refers to a type of outsourcing arrangement in which a business contracts with a third-party provider to handle certain administrative tasks, such as payroll, benefits and HR compliance. ASO providers do not assume co-employment responsibilities and do not become the employer of record for tax and compliance purposes.

What Is a Certified PEO?

A certified PEO (CPEO) is a PEO that has been certified by the IRS. To become a CPEO, a PEO must meet certain requirements.

• Be in good standing with the IRS: The PEO must have a clean record with the IRS and be up to date on all tax filings and payments.
• Have a bond in place: The PEO must have a surety bond in place to protect its clients’ tax liabilities.
• Demonstrate financial stability: The PEO must provide financial information to the IRS to demonstrate that it is financially stable and capable of fulfilling its obligations to its clients.
• Comply with certain employment tax requirements: The PEO must comply with certain employment tax requirements, such as withholding and depositing employment taxes on behalf of its clients.

The CPEO certification is designed to give businesses confidence that they are working with a reputable and trustworthy PEO that has the necessary resources and capabilities to handle their HR-related tasks effectively. It is important to note that not all PEOs are CPEOs, and businesses should research carefully any PEO they are considering working with to ensure that it meets their needs and expectations.

To choose a PEO, you should assess your business’s needs and compare pricing, features and contracts of different PEOs. You should also review the technology and user experience of potential PEOs, consider whether they specialize in your industry, check their accreditations and discuss any additional costs with their sales representatives before committing. To get a sense of the experience of current customers, you can read customer reviews.

It is also helpful to demo the software, as PEOs are co-employers and more than just a software service. When making your decision, prioritize PEOs that offer the features your business needs and have an excellent reputation for user experience and customer support.

Essential PEO Services

Here are some essential PEO services that businesses might consider when working with a PEO.

• HR and benefits administration: A PEO can help businesses manage their HR functions and administer employee benefits such as health insurance, retirement plans and time off policies.
• Payroll and tax processing: A PEO can handle payroll and tax processing for businesses, including calculating and issuing paychecks, withholding and depositing employment taxes and preparing and filing tax forms.
• Compliance management: A PEO can help businesses stay compliant with various employment laws and regulations such as those related to minimum wage, overtime and workplace safety.
• Recruiting and talent management: A PEO can provide support with recruiting and hiring employees, as well as managing and developing the talent within a business.
• Risk management: A PEO can help businesses manage risks related to their employees such as by providing workers’ compensation insurance and handling workplace safety issues.
• Employee training and development: A PEO can offer employee training and development resources to help businesses invest in the skills and knowledge of their workforce.
• Performance management: A PEO can provide tools and resources to help businesses set and track performance goals for their employees, as well as provide support for performance evaluations and feedback.

These are just a few examples of the types of services that a PEO might offer. The specific services provided can vary from one PEO to another, so it’s important to carefully review the offerings of any PEO you’re considering working with to ensure that it meets the needs of your business.

Certifications and Accreditations

PEOs may hold various certifications and accreditations that demonstrate their expertise and knowledge in specific areas. Here are some examples of certifications and accreditations that a PEO might have.

• Certified Professional Employer Organization (CPEO) certification: Issued by the IRS, this certification recognizes PEOs that meet certain requirements related to financial stability, employment tax compliance and bonding.
• Certified Payroll Professional (CPP) certification: Offered by the American Payroll Association (APA), this certification recognizes individuals who demonstrate expertise in payroll processing and compliance. A PEO with a CPP certification would likely have a strong understanding of payroll-related laws and regulations and be able to handle payroll tasks accurately and efficiently.
• Certified Employee Benefit Specialist (CEBS) certification: Offered by the International Foundation of Employee Benefit Plans (IFEBP), this certification recognizes individuals who demonstrate expertise in employee benefits. A PEO with a CEBS certification has a strong understanding of employee benefit laws and regulations and is able to help businesses design and administer benefits programs.
• Accreditation by the Employer Services Assurance Corporation (ESAC): This accreditation recognizes PEOs that meet high standards for financial stability and ethical business practices.
• SHRM Certified Professional (SHRM-CP) and SHRM Senior Certified Professional (SHRM-SCP): If a PEO holds one of these certifications, it is likely that it has a strong understanding of HR laws and regulations and can offer effective HR support to businesses.

Tech Stack

Here are some examples of technologies that a PEO might offer.

• Payroll processing software: This type of software can help a PEO handle payroll tasks such as calculating and issuing paychecks, withholding and depositing employment taxes and preparing and filing tax forms.
• HR management software: This type of software can help a PEO manage HR functions such as benefits administration, employee records and performance evaluations.
• Time and attendance tracking software: This type of software can help a PEO track employee hours worked, time off and other attendance-related information.
• Employee self-service portals: These portals can allow employees to access HR-related information and tools online such as benefits information and pay stubs. These are especially important because employees can access their own information without having to contact HR for things such as pay stubs, PTO balances or tax documents.

Industry Experience and Reputation

When choosing a PEO, it can be helpful to consider whether the PEO has experience working with businesses in your industry. A PEO that has experience working with businesses such as yours may be more familiar with the specific HR and employment needs of your industry and may be better equipped to provide relevant services and support.

In addition to considering the industry experience of a PEO, it can also be helpful to review customer reviews and ask for references from businesses that have worked with the PEO. Customer reviews can provide insight into the experience of businesses that have used the PEO’s services and can help you get a sense of the PEO’s reputation. Asking for references from businesses that have worked with the PEO can also be a helpful way to learn more about the PEO’s services and capabilities.

When evaluating the industry experience and reputation of a PEO, it is important to consider both positive and negative reviews and to look for patterns in the feedback that you receive. This can help you get a well-rounded understanding of the PEO’s capabilities and whether it is likely to be a good fit for your business.

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	Entry Level (per person per month)	Midrange (per person per month	High-End (per person per month)	Add-Ons
ADP TotalSource	Not listed	N/A	N/A	N/A
Engage PEO	Not listed	N/A	N/A	N/A
Paychex PEO	Not listed	N/A	N/A	N/A
TriNet	Not listed	N/A	N/A	N/A
Insperity	Not listed	N/A	N/A	N/A
Justworks	$59	N/A	$109	EOR, time tracking, and international contractor payments
AlphaStaff	Not listed	N/A	N/A	N/A
Deel	$89	N/A	N/A	EOR and immigration
Resourcing Edge	Not listed	N/A	N/A	N/A
INFINITI HR	Not listed	N/A	N/A	N/A

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PEOs typically charge a flat monthly fee or a percentage of your payroll. These costs can vary significantly depending on a number of factors, including the size of the business, the number of employees, the services being provided and the specific needs of the business.

PEO plans are typically structured on a per-employee, per-month basis, with businesses paying a fee for each employee that is enrolled in the plan. The fee may cover a variety of HR and employment services such as payroll processing, benefits administration and compliance with employment laws.

Here are some factors that can impact the cost of a PEO.

• The size of the business: Larger businesses may pay more for PEO services due to the increased number of employees and the complexity of the HR and employment needs.
• The services being provided: PEOs offer a range of services, and the specific services being provided can impact the overall cost of the plan.
• The specific needs of the business: A business with specific HR or employment needs, such as a high-risk industry or complex compliance requirements, may pay more for PEO services.

There are a few ways that a business may be able to reduce the cost of a PEO.

• Access to group rates for things such as employee benefits and workers’ compensation insurance may offset the cost of the PEO’s services
• Asking for quotes from multiple PEOs to compare pricing
• Evaluating the specific services being offered and considering whether all of them are necessary for the business