PEOs Charge Two to Seven Percent of Payroll

PEOs charge between 2-7% of the dollar volume of the payroll for their services (more for GEOs) generating revenue between $1,200 per employee per year up to $4,000 (source: JP Morgan).

See also:

• Back office

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• Professional Employer Organization

  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. PEOs charge two to seven percent of payroll.