Decide what problem you're solving
Benefits cost, HR workload, compliance risk and multi-state hiring each point to different PEOs. Write down the top two.
Know your numbers
- Headcount by state
- Annual payroll
- Current benefits premiums and plan design
- Workers' comp class codes and rates
- Renewal dates
Check certification
IRS CPEO certification makes the PEO solely liable for federal employment taxes on wages it pays. ESAC accreditation adds financial and operational standards backed by surety bonds. 122 PEOs were on the IRS active list dated Aug 7, 2026.
Compare total cost
Admin fees run about $40–$160 per employee per month or 2–12% of payroll. Benefits, workers' comp and state unemployment tax often matter more. Put each proposal on one page by line item.
Read the contract
- Term and notice period
- Renewal increase caps
- Termination fees
- Data and benefits transition terms