A professional employer organization (PEO) is a company that lets business owners outsource many of their human resource (HR) needs, including employee onboarding, payroll processing, health insurance and benefits, labor law compliance, and more.
A 2016 report from the National Association of Professional Employer Organizations (NAPEO) showed that businesses that use a PEO save 35% on HR administrative costs and grow 7% to 9% faster because they are able to put more focus on running their business.
We reviewed over a dozen PEO companies and chose the best based on offerings, ease of use, custom HR support, specialty, price, and more. Here are our top picks.
The 7 Best PEO Services of 2020
Best Overall: Justworks
Justworks was created in 2012 as a simple software platform combined with expert support for payroll, benefits, HR, and compliance. Today, Justworks has more than 600 employees and partnerships with major benefits providers like United Healthcare and MetLife. We chose it as the best overall because it’s affordable, easy to set up, and well-suited to helping small business owners who most need its help.
On the payroll front, Justworks makes it easy to set up full-time, part-time, salaried, or hourly employees, as well as contractors. The platform can automate direct deposits or make off-cycle vendor and contractor payments whenever needed. Justworks can also automatically file payroll taxes, W-2s, and 1099s and help users stay compliant with changing employment regulations.
In terms of benefits, Justworks partners with trusted providers to give employees access to medical, dental, vision, 401(k), and other perks, with plans and prices usually only available to large businesses.
Justworks streamlines hiring and onboarding with automated HR tools. New employees can self-onboard, set up direct deposits, choose benefits, and manage paid time off (PTO) all online. Employers can also store a company calendar and directory, handbooks and policies, and employee documents all online for easy access.
Finally, Justworks offers a variety of compliance support to take the busyness and worry out of running a business. The software handles withholding, reporting, remitting payroll taxes, and also files W-2s and 1099s. Users get access to a suite of online training to help them stay compliant with state and city harassment requirements. Justworks also offers live and online support for workers' compensation, COBRA management, unemployment insurance filings, wage garnishment, and more.
Justworks offers two plans with pricing based on the number of employees each business has. It also offers 24/7 support by phone, text, email, live chat, or Slack.
- Up to 24 employees: $49 per employee per month
- 25 to 99 employees: $44 per employee per month
- 100 to 174 employees: $39 per employee per month
- 175+ employees: Contact for pricing
- Payroll for salaried & hourly employees
- Off-cycle payments
- Vendor & contractor payments
- Employer payroll tax filings
- W-2 & 1099 filings
- Unemployment insurance filings
- Employment practices liability insurance
- HR consulting
- Harassment prevention & inclusion training
- Online employee onboarding
- Paid time off (PTO) management
- Calendar, doc center, directory
- Accounting software integrations
- Commuter benefits
- Plan setup
- Up to 24 employees: $99 per employee per month
- 25 to 99 employees: $89 per employee per month
- 100 to 174 employees: $79 per employee per month
- 175+ employees: Contact for pricing
- All Basic Plan features
- COBRA administration
- Health advocacy services
- One Medical (where available)
Runner-Up, Best Overall: Paychex
Paychex was founded in 1971 to make payroll outsourcing easy and affordable for small businesses. Today, the company has over 14,000 employees and more than a half-million small- to medium-sized businesses nationwide. We chose it as our runner-up because it offers a customizable HR platform with dedicated HR professionals assigned to each client.
Paychex offers the same services as Justworks and the other PEOs we reviewed. The Paychex Flex platform lets users manage HR, payroll, and benefits all from one dashboard. Employees can complete their new-hire onboarding, access and change their personal information, fill out tax forms, view payroll data, and more, all online.
Payroll can be submitted online from a desktop or mobile device or by phone, with Paychex calculating payroll taxes and sending them to the appropriate agencies. The platform can handle payments to salaried, hourly, and contract workers and supports direct deposit, paper checks, and payment cards. Paychex also offers a free mobile app for users and their employees.
Paychex makes it easy for employees to enroll for and manage benefits online. The company can work with an employer’s existing benefits providers or offer packages for various medical, dental, and vision plans, as well as 401(k), FSA, HSA, and HRA accounts. Paychex also monitors employment laws and regulations to help employers stay compliant with changes in workers' compensation, COBRA administration, unemployment insurance, and other issues.
What really sets Paychex apart from the other providers we reviewed is that it assigns a dedicated HR professional to each of its clients. Paychex HR professionals can offer assistance with hiring and managing employees, creating an employee handbook, employee training, annual enrollments, workplace safety, and more.
Paychex offers PEO plans with per-employee pricing to organizations with at least five employees. Each plan is scalable, and users can customize certain aspects, including medical or workers' compensation policies. Although Paycheck doesn’t list pricing on its site, our research showed that employers can expect to pay $100 a month per employee for a biweekly payroll with basic PEO services.
Best for Startups: XcelHR
Founded in 1994, XcelHR is a PEO focused on helping small business owners grow and become more profitable. A smaller company than most of the ones we reviewed, XcelHR boasts 8,000 customers and $300 million in payroll processed per year. We chose it as the best for startups because of its lower business size limit, flexible pricing, and small business consulting services.
XcelHR offers all of the standard PEO services, including HR management, payroll and tax administration, talent acquisition, benefits administration, retirement services, and risk management. The company’s cloud-based HR software combines time and attendance, onboarding, document management, and payroll processing on one platform with a customizable, user-friendly interface.
XcelHR also offers additional support for startups and small businesses beyond its PEO offerings. These include access to and technical support for the company’s preferred time-tracking and recruiting platforms, training webinars, local events, and an HR podcast.
XcelHR has built its pricing model to suit startups and small businesses. The company only requires employers to have one employee, has no payroll minimums, and lets employers choose between paying a percentage of their payroll or per employee. Although XcelHR doesn’t offer pricing on its website, our research shows that employers can expect to pay $120 per month per employee.
Best for Scaling: ADP TotalSource
ADP was established in 1949 under the name Automatic Payrolls, Inc., as a manual payroll processing business. Today, the company provides HR, payroll, talent, and benefits administration for 810,000 clients in 140 countries. We chose it as the best for scaling since it offers expertise and advanced HR consulting services for growing businesses.
Like most PEOs, ADP TotalSource offers a full suite of HR services, including payroll, recruiting, HR management, employee benefits, and labor law compliance. It can also help employers track tax payments and payroll data via a convenient mobile app.
One of ADPs greatest strengths is its deep compliance and regulatory expertise by industry. For example, ADP TotalSource’s dashboard makes it easy for healthcare providers to track licenses, certifications, and training all in one system. Businesses in the manufacturing industry can even get onsite OSHA and safety training from ADP’s HR professionals.
ADP offers businesses access to Fortune 500-caliber benefits, including cost-effective insurance, commuter benefits, perks and discounts, and 401(k) retirement savings plans. Employees can self-onboard and enroll for and manage all of their benefits online or with a mobile app.
ADP TotalSource pricing is based on a business’ credit rating, workers’ compensation rating, and health insurance experience. Although ADP doesn’t post prices on its site, our research shows that employers can expect to pay between $120 and $240 per month per employee.
Best for Custom HR Support: TriNet
Founded in 1988 in the San Francisco Bay Area, TriNet is a PEO providing small and medium-sized businesses (SMBs) with full-service HR solutions tailored by industry. It is classified as a Certified Professional Employer Organization by the IRS and currently serves over 18,000 clients and 330,000 employees. We chose it as the best for custom HR support since it offers one-on-one guidance from industry-specialized HR consultants.
As a PEO, TriNet offers a comprehensive HR platform with payroll services, employee self-service, online benefits enrollment, and an on-call team of professional HR specialists. All of this is available in a modern, streamlined interface as well as a mobile app.
TriNet offers accurate, compliant payroll complete with secure processing, tax withholding, and reporting for every type of employee. Employees can enroll in direct deposit, view and print pay stubs and W-2s, and track PTO, all through an easy-to-use self-service portal.
TriNet provides employers a range of insurance plans from leading carriers like Aetna, Blue Cross, MetLife, Kaiser Permanente, and more. Users can choose additional employee perks (like pet insurance and commuter benefits) to help attract new employees. And, TriNet helps employers navigate requirements for ACA, COBRA, disability, and state filings to avoid compliance issues.
TriNet customers get access to a talented pool of HR experts available to consult on anything from recruiting and onboarding to benefits and compliance. The company provides strategic HR services to help companies scale as well as tools to streamline talent recruitment and hiring, including workshops and resources to help with talent retention and growth.
TriNet is unique in that it customizes its PEO offering based on industry and business size. A marketing company with 50 employees will be taken to a page on TriNet’s site focused on the particular needs of that type of business along with case studies of TriNet’s clients in that industry. This helps customers see exactly how a PEO like TriNet can help their business.
TriNet’s pricing is based on variables including industry, company size, and location. As a result, no prices are listed on its website, but our research showed that employers can expect to pay $125 a month per employee.
Best for Franchises: INFINITI HR
INFINITI HR was founded in 2008 by two former XcelHR sales associates. The owners’ vision was to create the first-ever customizable PEO that offered a variety of services in addition to traditional human resources offerings. We chose it as the best for franchises because of its unique recognition and expertise as a PEO for franchises.
Unlike other PEO providers that only offer bundled PEO packages, INFINITI HR allows employers to pick and choose the services they need. Users who choose INFINITI HR’s PEO get a full range of payroll and tax filing, state-specific HR management, employee benefits, workers’ comp, and compliance services and support.
Employers can choose from separate HR offerings, including outsourced payroll services with real-time tax calculations and filing; health, dental, vision, and life insurance and other employee perks; workers’ compensation, unemployment, and liability claims administration; compliance and risk management; on-demand HR consulting; and affordable recruitment process outsourcing (RPO).
INFINITI HR is a premium supplier to the International Franchise Association (IFA) and the preferred supplier to many of the most recognized brands throughout the United States. Its franchise services include managing payroll, providing access to employee benefits, and managing worker’s compensation insurance. INFINITI HR also helps franchisees attract and retain top talent; ensure their operations are compliant with all federal, state, and local regulations; and protect themselves from employer liability.
Like many of the PEOs we reviewed, INFINITI HR doesn’t offer pricing on its website, but employers can expect to pay $100 or more per month per employee—within the same price range of most PEOs.
Best for Extra Features: Oasis Outsourcing
Formed in 1996, Oasis is a PEO providing human resources, employee benefits, payroll, and risk management services on an outsourced basis. The company focuses on à la carte human resources and staffing services to provide cost savings for its clients. We chose it as the best for extra features because it provides extensive training resources, personalized service, and flexible pricing.
Oasis Outsourcing offers many standard PEO services, including human resources, employee benefits, risk management, and payroll. What sets it apart from other PEOs we reviewed, however, is its unique service model. Oasis Outsourcing creates a Client Services Team for each of its customers consisting of a Senior HR Generalist and a Payroll Account Manager.
The Senior HR Generalist supports businesses on their growth goals and strategy, employee relations, and performance management needs. They also deliver updates, support, and information on compliance regulations and offer training for businesses and their employees.
The Payroll Account Manager handles all payroll activities, including payroll processing, maintaining employee records, garnishments, time and attendance, and W-2s. They can also answer and research basic payroll questions and generate custom reports for their clients.
Oasis Outsourcing bases its pricing on the services each of its customers want. While the company doesn’t list prices on its website, our research showed that employers can expect to pay $100 to $125 per month per employee which includes dedicated HR consulting services.
What Is a PEO Service?
PEOs partner with businesses to provide payroll, benefits, and human resources support. They operate under a co-employment model where the business keeps control of all its employees, but the employees appear on the PEO's books for tax and compliance purposes.
Outsourcing essential HR services can save small businesses a lot of time and money that they can then use to grow the business. PEOs also have collective buying power which means that they can offer affordable health insurance and other employee benefits to businesses. Finally, PEOs have experienced HR consultants who can help businesses write employee manuals and policies that are compliant with labor laws.
How Does a PEO Service Work?
Employers typically connect to their PEO service through an online dashboard. The software walks the user through setting up employees, benefits, payroll, company handbooks, and more. Most also have a live chat feature where users can connect with an experienced HR professional during business hours when needed.
In addition to the employer backend, PEO dashboards also feature an interface for employees. This lets them get onboarded with the company, set up direct deposit or other payment methods, choose and manage benefits, and view and download tax documents.
Most PEOs offer their services as a bundled package. Some, however, allow businesses to choose only what they need. For instance, a business with an established payroll provider may choose to use only a PEO’s employee benefits or HR compliance services.
How Much Does a PEO Service Cost?
Nearly all of the PEOs we reviewed require customers to request a quote. This is because they try to customize their packages based on the needs of each customer. In our research, we found that most charge between $40 to $240 per employee per month. Many PEO services will work only with businesses that have a minimum number of employees, typically five to 10.
In addition to the PEO’s fees, employers will need to pay their portion of employee benefits, including workers' compensation.
Are PEO Services Worth the Cost?
Using a PEO can be a great way to grow and run a business. For one thing, PEO clients are able to pool together to get access to group health insurance plans for much lower rates than individual plans. By offering the same benefits as large employers, these small to mid-size businesses can compete for top talent.
Also, because PEO’s give their customers access to experienced HR professionals, they can help businesses stay compliant with ever-changing federal, state, and local labor laws and ensure businesses pay and file their payroll taxes on time. The financial penalties of businesses that fail to stay compliant or slip even once can be ruinous.
How We Chose the Best PEO Services
We looked at over a dozen PEO service providers as part of this review. We looked for companies that offer a full suite of HR services in a way that’s easy for both employees and employers to use. We also made sure to find providers that offer on-demand or dedicated support from flesh-and-blood HR consultants. Having an HR professional just a phone call or chat away can be invaluable for a business dealing with a tricky HR question.
Finally, we wanted to highlight providers that were best suited for companies at different stages, from startups to those scaling quickly as well as franchisees who need to get their employees up to speed and onboarded quickly. We were then able to identify the best PEO services to help businesses grow and thrive.
Social Hire. "4 PEO Stats That May Surprise You (And Help Your Company)." Accessed July 8, 2020.