PEO Services Pricing

The costs of a PEO-Employer relationship start with a one-time setup fee of $1,000 to $5,000. This cost covers the planning and setup of the program, writing up the documents and contracts, and negotiating with different benefits providers.

PEO services generally make their money by charging a percentage of your company’s entire payroll – roughly 2% to 6% each pay period. This rate depends on the number of services you require, the complexity of your industry, and overall risk. For example, you’ll pay more if you employ several low salaried employees or work in an industry with a high rate of workplace injury; highly compensated employees and relatively safe work environments will pay the lower rate. You can also earn volume discounts if you have several employees on staff.

Some PEO services offer all-in-one service that bundles all responsibilities of an HR department for as much as 12% to 15% of gross payroll – a far cry below the costs of a full-time HR director.

In addition, you can select certain PEO services on an a la carte basis including:

• Employee background screenings ($40 to $75)
• Drug testing ($75 to $120)
• Payroll additions and removals ($50 each)
• Tax filing, recruitment efforts, onsite training, 401k rollover (1% to 2% of total salaries)

Contracts can be voided with 30 days notice. To cancel your working arrangement, you simply don’t submit a payroll for the upcoming pay period. However, make sure you carefully review the PEO client-service agreement to find out where liabilities rest once the contract ends.