PEO vs Direct Employer 2027 Comparison Calculator
Compare PEO (Professional Employer Organization) vs direct employer payroll 2027 — PEO bundles benefits, payroll, HR. Cost vs control trade-off for small biz.
PEO Mechanics
Co-employment: PEO is employer-of-record for tax purposes. You manage day-to-day work. PEO handles payroll, taxes, benefits, compliance, workers comp.
PEO Benefits Advantage
PEO pools thousands of clients into 'master health plan'. Get Fortune 500 rates. Small business alone would pay 20-40% more for same coverage.
PEO Cost Structure
Either: % of payroll (3-12%) OR per-employee/month ($75-180). All-in including benefits, HR, workers comp, unemployment, compliance.
When PEO Wins
Under 50 employees. No HR director. High benefits cost concern. Multi-state operations. Worker comp expensive. Want compliance offloaded.
Source: napeo.org PEO industry research, sba.gov small business hiring. Last updated: May 2026.
Frequently Asked Questions
Top PEO providers?
TriNet, ADP TotalSource, Insperity, Justworks, Gusto Embedded. Compare quotes — pricing varies wildly by industry/state.
Can I leave PEO?
Yes. Usually 60-90 day notice. Then unwind: employees re-onboard to your direct payroll/benefits. Can be disruptive.
Tax credits affected?
PEO holds tax credits (ERC, WOTC) in some cases. Verify pass-through. Some PEOs charge to file.