Definition
Pricing where the PEO's fee is a percentage of your gross payroll, commonly 2% to 12%.
Percentage of payroll pricing explained
With percentage pricing, fees rise with raises, bonuses and new hires even if headcount is flat. It can work for lower-wage workforces; for high earners, PEPM is usually cheaper. Insperity is among the PEOs that price this way.
Ask whether the percentage applies to bonuses and commissions, and convert any quote to an effective PEPM to compare it with others.
Where Percentage of payroll pricing comes up
PEOs mentioned