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An outsourcing firm that typically offers payroll services, tax withholding, HR, and benefits. Employees contract directly with the company (e.g. the offer letter origin is the company not the PEO) and then the PEO enrolls them in payroll and other services.
A payroll partners that is responsible for employment compliance and liability of employees. Companies contract with them to outsource the work of setting up operations in all jurisdictions in which they have employees.