As a small business owner, you wear a lot of hats — from hiring and payroll to managing compliance and employee benefits. That’s why more businesses are turning to Professional Employer Organizations (PEOs) to handle HR tasks efficiently. But one of the first questions we often hear is: How much do PEO services cost?
Let’s break it down so you know exactly what to expect — and how to find the right value for your business.
What Is a PEO?
A Professional Employer Organization (PEO) partners with your business through a co-employment relationship. That means they handle many of your HR tasks, including:
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Payroll processing and tax filings
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Employee benefits and insurance
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Workers’ compensation
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Compliance with labor laws
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Recruiting and onboarding support
Instead of hiring in-house HR staff or juggling it all yourself, a PEO takes the administrative load off your plate — so you can focus on growing your business.
How Do PEOs Charge for Their Services?
PEO pricing usually falls into two main models:
1. Flat Fee Per Employee
In this model, the PEO charges a fixed amount per employee per month. The average cost usually ranges from $40 to $160 per employee per month, depending on the services included and your company’s size and industry.
2. Percentage of Payroll
Here, the PEO charges a percentage of your total monthly payroll. This is typically 2% to 12% of gross payroll. The percentage can vary based on:
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Number of employees
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Risk level of your industry
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Scope of services you need
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Employee turnover rate
What’s Included in the Cost?
While exact pricing varies, most PEO service bundles include:
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Payroll & tax administration
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Access to large-group employee benefits
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HR compliance support
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Workers’ compensation insurance
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Employee onboarding and handbooks
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HR technology platforms
These are services that can be costly to manage separately. Bundling them through a PEO often leads to significant savings — and fewer headaches.
What Affects PEO Pricing?
Here are a few key factors that influence your final cost:
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Company size: More employees can lower per-employee rates
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Industry type: High-risk industries may pay more
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Benefits needs: Richer benefits packages can increase costs
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Location: Regulations and insurance rates vary by state
Is Using a PEO Worth the Cost?
For many small businesses, the answer is a resounding yes. A recent NAPEO study found that businesses using a PEO grow 7-9% faster, experience 10-14% lower employee turnover, and are 50% less likely to go out of business.
The right PEO can help you save on insurance premiums, avoid costly HR mistakes, and stay compliant — all while providing Fortune 500-level benefits to attract top talent.
How NetPEO Helps You Find the Best Value
At NetPEO, we specialize in helping small businesses compare quotes and find the best-fit PEO partner — without the headache.
We work with hundreds of top-rated PEOs across the country and negotiate on your behalf to find the best pricing and services for your needs. And the best part? Our service is 100% free to use.
Ready to Get a Custom PEO Quote?
If you’re wondering what PEO pricing would look like for your business, we make it easy.
✅ Fill out our quick form
✅ Get matched with top PEO providers
✅ Compare custom quotes and save
Stop guessing about PEO costs — let NetPEO guide you to the best solution for your business.
