PEO
A professional employer organization co-employs your staff, taking on payroll, benefits administration, and HR compliance while you direct the work.
You keep the employment relationship but share it: the PEO becomes the employer of record for tax and benefits purposes, pooling your employees with those of other clients to obtain better insurance rates. It is a US-centric model used mostly by small and mid-sized companies that want enterprise-grade benefits without an HR department.
When it fits
When it does not
What it costs
Usually 2 to 12 percent of total payroll, or a per-employee monthly fee, with the benefits saving often offsetting a meaningful share of it.
A PEO co-employs staff you could legally employ yourself, usually to improve benefits and offload HR. An EOR employs people you legally cannot, because you have no entity there.
No. Day-to-day direction, hiring decisions, and terminations remain yours; the PEO handles the administrative employer functions.
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