Understanding PEO Pricing

There are a number of methods commonly implemented by our partners to develop a quote for HR outsourcing packages. Our analysts at PEO Resources, in conjunction with our partner organizations, will be glad to explain your quote and answer any questions you may have. In order to full understand the costs associated with PEO service provision, one must consider all of the components of the service. Every employer has certain obligations for taxes, insurance and administration. The following is intended to elaborate upon these components to grant you a clear idea of the complexities of whole and an appreciation for costs.

Pricing Components

Statutory Obligations

Each PEO quote will typically include a price that covers employer related obligations. This includes the taxes for the employer portion of FICA, FUTA and Medicare. These costs are your company’s obligation and cost, whether you engage a PEO or not.

Payroll Services

PEOs include the payroll service as part of their standard offering and, as such, will be included in your quote.

Specifically Requested Services and Benefits

As no two businesses are precisely alike, our members will provide quotes based upon the unique needs of your company or personal requests. Any services or benefits requested in addition to standard options will be specifically addressed within the quote and added to the total.

Workers’ Compensation

Every state in the US excepting Texas requires an employer to maintain Workers’ Compensation (Workers’ Comp) coverage for their employees. It is a cost born by the employer and it is illegal to pass these costs on to employees for coverage. PEO quotes will include this coverage for your employees.

Health and Supplemental insurance

If you requested quotes including Health Insurance coverage for your organization, your PEO quotes will include the relevant rates. Rates included in your quote will be based upon employee, employee plus spouse, head of household and family coverage. When comparing coverage plans, be certain to consider the type of plan (PPO, HMO, etc.), deductible amounts, and supported doctor networks within each plan. A great price is not advantageous to you or your employees if the deductibles are higher than expected and there are no conveniently located doctors in your supported network.

Specially Requested HR Services

If you request particular, enhanced services – applicant background checks, for instance -, these services may be charged on a ‘per use’ basis. Pricing will be included in the quotes per use or for the general availability of the service.

Package Service Levels

Some PEO’s may offer echelons of service in the form of ‘gold’, ‘silver’, or ‘bronze’ packages with individual programs included as part of the price. This is a facet of the quotes that ought to be noted as the cheapest available package may not be the best fit for your organization.