--- title: What is a PEO Service Provider? description: Learn what PEO stands for, what a PEO payroll service is and what services they offer, how your business can benefit from partnering with a PEO, and much more. image: https://blog.proliant.com/hubfs/3%20-%20Blog%20Images/peo-professional-employer-organization.jpg --- [![Proliant - Print Logo - No Strokes](https://blog.proliant.com/hubfs/01%20-%20Website/Logos/Proliant%20-%20Print%20Logo%20-%20No%20Strokes.svg "Proliant - Print Logo - No Strokes")](https://www.proliant.com) [Request Meeting](https://www.proliant.com/request-meeting) ** ** **Payroll** **Talent** **Workforce Management** **Benefits** **Platform** **Integrations** **ProLiant Mobile** Your employees can stay connected. **Anytime, anywhere**. ![proliant-mobile-mockup-mega-menu](https://blog.proliant.com/hubfs/01%20-%20Website/4%20-%20Main%20Pages/Home/proliant-mobile-mockup-mega-menu.png "proliant-mobile-mockup-mega-menu") [![Proliant - Print Logo - No Strokes](https://blog.proliant.com/hubfs/01%20-%20Website/Logos/Proliant%20-%20Print%20Logo%20-%20No%20Strokes.svg "Proliant - Print Logo - No Strokes")](https://www.proliant.com) [Request Meeting](https://www.proliant.com/request-meeting) ** ** **Payroll** **Talent** **Workforce Management** **Benefits** **Platform** **Integrations** **ProLiant Mobile** Your employees can stay connected. **Anytime, anywhere**. ![proliant-mobile-mockup-mega-menu](https://blog.proliant.com/hubfs/01%20-%20Website/4%20-%20Main%20Pages/Home/proliant-mobile-mockup-mega-menu.png "proliant-mobile-mockup-mega-menu") Search **Menu** ** ** [Request Meeting](https://www.proliant.com/request-meeting) ![](https://blog.proliant.com/hubfs/3%20-%20Blog%20Images/peo-professional-employer-organization.jpg) [Payroll](https://blog.proliant.com/topic/payroll) | 2 min read # What is a PEO Service Provider? [![ProLiant](https://blog.proliant.com/hubfs/Logos/Color%20Proliant/P%20logo%20Glassdoor.jpg)](https://blog.proliant.com/author/proliant) Written by [ProLiant](https://blog.proliant.com/author/proliant) Aug 12, 2022 10:00:00 AM When businesses are just getting started, they can benefit from the use of a PEO provider to help manage employees and other processes. Although partnering with a PEO requires business owners to relinquish some of their autonomy, it’s often a more affordable choice for managing HR and payroll than hiring a team in-house. However, as businesses begin to grow, a PEO may not be suitable.  Let’s take a closer look at some of the most frequently asked questions about PEO.  ## **What does PEO stand for?** PEO stands for professional employer organization. When a company signs up with a PEO, the company is essentially outsourcing some or all of its payroll, HR, and benefits tasks instead of doing them in-house.  ## **What is a PEO company?** A PEO provides HR services for businesses and acts as a co-employer of a business’s employees. The relationship between a business and a PEO is a partnership with a co-employment arrangement. Additionally, the company operates under the PEO's FEIN instead of their own. Typically, small companies join PEOs to save money, but as they grow, the cost begins to outweigh the benefits.  ## **What are PEO payroll services?**  A PEO allows smaller and mid-sized businesses to focus on growth instead of managing employees, offering services such as:  - Payroll - Benefits Management - Unemployment Management - Payroll Taxes - Workers’ Compensation Insurance Basically, the business remains the primary employer, but the PEO handles HR-specific tasks.    ## **What are the benefits of a PEO?** According to a study published by the National Association of Professional Employer Organizations, small businesses that partner with a PEO have [40% higher revenue growth](https://www.napeo.org/docs/default-source/white-papers/2017-napeo-white-paper-final.pdf?sfvrsn=2). Additionally, businesses partnering with a PEO experience more than 10% less employee turnover than those that don’t. Other [benefits](https://www.business.com/articles/what-is-a-peo/) include:  - Eliminate many routine administrative tasks - Save time - Gain access to affordable, comprehensive benefits and insurance coverage - Maintain legal compliance Small and medium-sized businesses benefit the most from PEOs because they allow these businesses to focus on growth.  ## **What is the cost of a PEO?** The cost of a PEO varies based on the size of the company and its services. According to [business.com](https://www.business.com/articles/what-is-a-peo/), most have one of two cost structures:  1. **Per employee:** Some PEOs that bill per employee also charge a base fee. They are usually monthly costs that you negotiate directly with the PEO. Charges per employee can range from $1,000 to $1,500 per year. This fixed amount allows for an accurate expense of the PEO.  2. **Payroll percentage:** With this cost structure, you pay a percentage of your total payroll for each pay period. This percentage includes workers' compensation, [employer practice liability insurance](https://www.iii.org/article/what-employment-practices-liability-insurance-epli), and local, state, and federal taxes. Payroll percentage changes according to your payroll amount that month, which usually comes out to be less than hiring your own HR team.  ## **When should a business move away from a PEO?**  A business should consider moving away from a PEO when it reaches [20 to 50 full-time employees](https://www.business.com/articles/what-is-a-peo/). At this point, the HR functions within the business become more vital, and it’s better to handle them internally.  ## **What are the cons of working with a PEO?** Companies usually choose PEOs because they're inexpensive and they can "set and forget" their payroll & HR tasks. However, a company on a PEO loses its autonomy or ability to create its own policies because it doesn’t operate under its own FEIN. Other [cons for working with a PEO](https://www.business.com/articles/what-is-a-peo/) include:  - Loss of some control over HR functions - Delay in communication - Expensive to form or leave the partnership - Lose any control over benefits and insurance Payroll & HR companies like Proliant can help businesses move from a PEO by “untangling” their services with the help of our partners (financial advisors, benefits brokers, P&C brokers, etc.) so that the business can regain autonomy. Learn more about how we can help your business with innovative [online payroll services](https://www.proliant.com/payroll-services) and HR solutions by [contacting our experts](https://www.proliant.com/cs/c/?cta_guid=6c5a3e39-b638-4584-a4a9-4b3e7aac61ec&signature=AAH58kEaUhnfEF30YvddhdmdeRmCQCxr6A&pageId=6349438830&placement_guid=7229eede-7b83-488b-8e3c-5153d868a297&click=529bdb3c-ab9c-4f47-965b-41de0c8f8368&hsutk=c7c3cebf16548bc31014add0282e75f2&canon=https%3A%2F%2Fwww.proliant.com%2F&portal_id=426846&redirect_url=APefjpHw9p7TGGRQO8X31M8Dru9TotSN7Yaf2RLmZ8CIZKNopH46ygtxg9sYweYj2XjXahQwllvAt9SuLdfEpKREWxwkBBV7j9mNcMItz2TiQNmQpn3Wq71VabeNveE2EJq4bwOZZDKtfm1wsxIGFAg3b_agM_kdV-pEjZTLFTmGRY3pKFUb1cbnw6pSev20hKWOlWA3oi3VXX560ssfGi-mD95W548d4sxlIEJY8mIM-KNby-VKOFQ&__hstc=11825963.c7c3cebf16548bc31014add0282e75f2.1645125496338.1660256216350.1660336454584.264&__hssc=11825963.1.1660336454584&__hsfp=3628619957&contentType=standard-page).    ## A Great Offer, Just a Click Away Lorem ipsum dolor sit amet, consectetur adipiscing elit ![](https://cdn2.hubspot.net/hub/273774/hubfs/mp/themes/Act-Theme/images/act-sample-opa1.jpg?width=900&name=act-sample-opa1.jpg) ### About ProLiant *ProLiant puts the human in human resources. We provide a fully integrated, cloud-based HCM solution that simplifies payroll and HR processes. The company serves small to large clients in multiple industries in all 50 states and is committed to providing the highest quality customer service in the industry.* ### Subscribe to Blog - [Recent](https://blog.proliant.com/peo-service-provider#recent) - [Topics](https://blog.proliant.com/peo-service-provider#topics) - [Archive](https://blog.proliant.com/peo-service-provider#archive) - [Applicant Tracking & Recruitment (15)](https://blog.proliant.com/topic/applicant-tracking-recruitment) - [Automation & Workflows (5)](https://blog.proliant.com/topic/automation-workflows) - [Benefits Administration (14)](https://blog.proliant.com/topic/benefits-administration) - [Compliance (1)](https://blog.proliant.com/topic/compliance) - [Earned Wage Access (12)](https://blog.proliant.com/topic/earned-wage-access) - [Employee Onboarding (9)](https://blog.proliant.com/topic/employee-onboarding) - [HR (32)](https://blog.proliant.com/topic/hr) - [Industry News (11)](https://blog.proliant.com/topic/industry-news) - [Integrations (5)](https://blog.proliant.com/topic/integrations) - [Learning Management System (4)](https://blog.proliant.com/topic/learning-management-system) - [Payroll (30)](https://blog.proliant.com/topic/payroll) - [Performance Management (11)](https://blog.proliant.com/topic/performance-management) - [Recruitment & Retention (12)](https://blog.proliant.com/topic/recruitment-retention) - [Security (1)](https://blog.proliant.com/topic/security) - [Tax Services (8)](https://blog.proliant.com/topic/tax-services) - [Time & Labor Management (1)](https://blog.proliant.com/topic/time-labor-management) - [Toast (1)](https://blog.proliant.com/topic/toast) [More...](https://blog.proliant.com/peo-service-provider#) - [June 2026 (1)](https://blog.proliant.com/archive/2026/06) - [April 2026 (1)](https://blog.proliant.com/archive/2026/04) - [February 2026 (1)](https://blog.proliant.com/archive/2026/02) - [December 2025 (1)](https://blog.proliant.com/archive/2025/12) - [October 2025 (1)](https://blog.proliant.com/archive/2025/10) - [July 2025 (2)](https://blog.proliant.com/archive/2025/07) - [June 2025 (1)](https://blog.proliant.com/archive/2025/06) - [May 2025 (1)](https://blog.proliant.com/archive/2025/05) - [April 2025 (1)](https://blog.proliant.com/archive/2025/04) - [March 2025 (1)](https://blog.proliant.com/archive/2025/03) - [February 2025 (1)](https://blog.proliant.com/archive/2025/02) - [January 2025 (1)](https://blog.proliant.com/archive/2025/01) - [November 2024 (1)](https://blog.proliant.com/archive/2024/11) - [October 2024 (4)](https://blog.proliant.com/archive/2024/10) - [September 2024 (2)](https://blog.proliant.com/archive/2024/09) - [August 2024 (4)](https://blog.proliant.com/archive/2024/08) - [June 2024 (1)](https://blog.proliant.com/archive/2024/06) - [May 2024 (2)](https://blog.proliant.com/archive/2024/05) - [April 2024 (3)](https://blog.proliant.com/archive/2024/04) - [March 2024 (1)](https://blog.proliant.com/archive/2024/03) - [February 2024 (1)](https://blog.proliant.com/archive/2024/02) - [January 2024 (1)](https://blog.proliant.com/archive/2024/01) - [December 2023 (1)](https://blog.proliant.com/archive/2023/12) - [November 2023 (2)](https://blog.proliant.com/archive/2023/11) - [October 2023 (8)](https://blog.proliant.com/archive/2023/10) - [September 2023 (5)](https://blog.proliant.com/archive/2023/09) - [August 2023 (1)](https://blog.proliant.com/archive/2023/08) - [July 2023 (3)](https://blog.proliant.com/archive/2023/07) - [June 2023 (6)](https://blog.proliant.com/archive/2023/06) - [May 2023 (4)](https://blog.proliant.com/archive/2023/05) - [April 2023 (2)](https://blog.proliant.com/archive/2023/04) - [March 2023 (2)](https://blog.proliant.com/archive/2023/03) - [February 2023 (3)](https://blog.proliant.com/archive/2023/02) - [January 2023 (1)](https://blog.proliant.com/archive/2023/01) - [December 2022 (3)](https://blog.proliant.com/archive/2022/12) - [November 2022 (2)](https://blog.proliant.com/archive/2022/11) - [October 2022 (1)](https://blog.proliant.com/archive/2022/10) - [September 2022 (1)](https://blog.proliant.com/archive/2022/09) - [August 2022 (5)](https://blog.proliant.com/archive/2022/08) - [July 2022 (2)](https://blog.proliant.com/archive/2022/07) - [June 2022 (2)](https://blog.proliant.com/archive/2022/06) - [May 2022 (6)](https://blog.proliant.com/archive/2022/05) - [April 2022 (5)](https://blog.proliant.com/archive/2022/04) - [March 2022 (4)](https://blog.proliant.com/archive/2022/03) - [February 2022 (3)](https://blog.proliant.com/archive/2022/02) - [January 2022 (3)](https://blog.proliant.com/archive/2022/01) - [December 2021 (3)](https://blog.proliant.com/archive/2021/12) - [November 2021 (2)](https://blog.proliant.com/archive/2021/11) - [October 2021 (2)](https://blog.proliant.com/archive/2021/10) - [September 2021 (1)](https://blog.proliant.com/archive/2021/09) - [August 2021 (1)](https://blog.proliant.com/archive/2021/08) - [July 2021 (3)](https://blog.proliant.com/archive/2021/07) - [October 2020 (1)](https://blog.proliant.com/archive/2020/10) - [September 2020 (1)](https://blog.proliant.com/archive/2020/09) - [August 2020 (1)](https://blog.proliant.com/archive/2020/08) - [June 2020 (2)](https://blog.proliant.com/archive/2020/06) - [January 2020 (3)](https://blog.proliant.com/archive/2020/01) - [December 2019 (4)](https://blog.proliant.com/archive/2019/12) - [November 2019 (3)](https://blog.proliant.com/archive/2019/11) - [October 2019 (1)](https://blog.proliant.com/archive/2019/10) - [September 2019 (1)](https://blog.proliant.com/archive/2019/09) - [July 2019 (2)](https://blog.proliant.com/archive/2019/07) - [June 2019 (4)](https://blog.proliant.com/archive/2019/06) - [May 2019 (11)](https://blog.proliant.com/archive/2019/05) - [April 2019 (3)](https://blog.proliant.com/archive/2019/04) - [January 2019 (1)](https://blog.proliant.com/archive/2019/01) - [December 2018 (1)](https://blog.proliant.com/archive/2018/12) - [November 2018 (1)](https://blog.proliant.com/archive/2018/11) - [August 2018 (1)](https://blog.proliant.com/archive/2018/08) - [February 2018 (2)](https://blog.proliant.com/archive/2018/02) - [January 2018 (3)](https://blog.proliant.com/archive/2018/01) - [November 2017 (1)](https://blog.proliant.com/archive/2017/11) - [October 2017 (2)](https://blog.proliant.com/archive/2017/10) - [August 2017 (2)](https://blog.proliant.com/archive/2017/08) - [May 2017 (1)](https://blog.proliant.com/archive/2017/05) - [March 2017 (1)](https://blog.proliant.com/archive/2017/03) - [January 2017 (1)](https://blog.proliant.com/archive/2017/01) - [August 2016 (2)](https://blog.proliant.com/archive/2016/08) - [April 2016 (1)](https://blog.proliant.com/archive/2016/04) - [March 2016 (1)](https://blog.proliant.com/archive/2016/03) - [February 2016 (1)](https://blog.proliant.com/archive/2016/02) - [October 2015 (2)](https://blog.proliant.com/archive/2015/10) - [July 2015 (1)](https://blog.proliant.com/archive/2015/07) [More...](https://blog.proliant.com/peo-service-provider#) Previous Story [← How to Create an Offer Letter That Will Make an Impact](https://blog.proliant.com/how-to-create-an-offer-letter) [** ](https://blog.proliant.com/) Next Story [Crucial Tips for an Effortless 2023 Annual Enrollment Period →](https://blog.proliant.com/annual-enrollment-period) ## You May Also Like These Stories on Payroll [![](https://blog.proliant.com/hubfs/03%20-%20Blog%20Images/01%20-%20Proliant%20Blog/01%20-%20Feature%20Images/Innovations%20in%202025%20That%20Shaped%20HR%20%26%20Payroll.jpg) ](https://blog.proliant.com/innovations-in-2025-that-shaped-hr-payroll) [HR](https://blog.proliant.com/topic/hr) ### [Innovations in 2025 That Shaped HR & Payroll](https://blog.proliant.com/innovations-in-2025-that-shaped-hr-payroll) Oct 2, 2025 10:51:53 AM | 2 min read [![](https://blog.proliant.com/hubfs/03%20-%20Blog%20Images/01%20-%20Proliant%20Blog/01%20-%20Feature%20Images/How%20No%20Tax%20on%20Tips%20and%20Overtime%20Affects%20Businesses.jpg) ](https://blog.proliant.com/how-no-tax-on-tips-and-overtime-affects-businesses-what-employers-need-to-know) [Payroll](https://blog.proliant.com/topic/payroll) ### [How No Tax on Tips and Overtime Affects Businesses: What Employers Need to Know](https://blog.proliant.com/how-no-tax-on-tips-and-overtime-affects-businesses-what-employers-need-to-know) Jul 17, 2025 9:32:59 AM | 6 min read [![](https://blog.proliant.com/hubfs/03%20-%20Blog%20Images/01%20-%20Proliant%20Blog/01%20-%20Feature%20Images/Our%20Top%20Six%20Features%20To%20Look%20For%20in%20a%20Mobile%20App%20for%20HR%20and%20Payroll.jpg) ](https://blog.proliant.com/our-top-six-features-to-look-for-in-a-mobile-app-for-hr-and-payroll) [Payroll](https://blog.proliant.com/topic/payroll) ### [Our Top Six Features To Look For in a Mobile App for HR and Payroll](https://blog.proliant.com/our-top-six-features-to-look-for-in-a-mobile-app-for-hr-and-payroll) Jul 7, 2025 12:04:03 PM | 2 min read ** ### Subscribe by Email ## No Comments Yet Let us know what you think [![proliant-white-logo-no-strokes](https://blog.proliant.com/hs-fs/hubfs/0%20-%20Proliant%20Branding/ProLiant%20Logos/proliant-white-logo-no-strokes.png?width=205&height=40&name=proliant-white-logo-no-strokes.png "proliant-white-logo-no-strokes")](https://www.proliant.com/) **Headquarters** 1100 Abernathy Road, Suite 850 Atlanta, GA 30328 877.896.9523 [Need Help?](https://www.proliant.com/contact-us) [Login](https://www.readypayonline.com/Proliant/Login/Login.aspx?) Copyright © 2022 Proliant, Inc. All Rights Reserved. #### Solutions [Applicant Tracking & Recruitment](https://www.proliant.com/applicant-tracking-recruitment) [Time & Labor Management](https://www.proliant.com/time-labor-management) [HR & Benefits Administration](https://www.proliant.com/hr-benefits-administration) [Employee Onboarding](https://www.proliant.com/onboarding) [Online Payroll Services](https://www.proliant.com/payroll-services) [Payroll Tax Services](https://www.proliant.com/payroll-tax-services) [Performance Management](https://www.proliant.com/performance-management) [ReadyPay Today](https://www.proliant.com/readypaytoday) [Learning Management System](https://www.proliant.com/learning-management-system) #### Who We Serve [Your Industry](https://www.proliant.com/your-industry) [Integrations](https://www.proliant.com/integrations) [Partners](https://www.proliant.com/partners) #### Why Proliant [About Us](https://www.proliant.com/about-us) [News](https://blog.proliant.com/inthenews) [Careers](https://www.proliant.com/careers) [Automation](https://www.proliant.com/payroll-automation) [Workflows](https://www.proliant.com/hr-workflows) [Services](https://www.proliant.com/services) #### Legal [Legal](https://www.proliant.com/legal-notices) [Terms](https://www.proliant.com/terms-of-use) [Privacy](https://www.proliant.com/privacy-policy) [Form 1095-C Notice](https://www.proliant.com/employee-1095c-notice)