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.

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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.