PEO pricing is one of the most confusing parts of the industry. Different PEOs use different pricing models, quotes often look different at first glance, and "what's included vs. passed through" varies. Here's how to make sense of it.
Bundled (or "flat") pricing: a single per-employee-per-month rate that includes admin fees plus benefits and workers' comp. Justworks is the cleanest example — their published per-employee rates include health benefits administration. Unbundled (or "itemized") pricing: admin fee charged separately from benefits, workers' comp, and 401(k) fees, each of which is passed through at cost or with a small markup. ADP TotalSource and Insperity typically use this model. Both can work; just make sure you're comparing them on the same basis.
Admin fee only: $40–$120 PEPM depending on PEO and company size. Bundled (admin + benefits admin + workers' comp): $100–$220 PEPM. As a percentage of payroll: 2%–12% depending on benefits richness, workers' comp class codes, and PEO.
Payroll processing, all tax filings, W-2/W-4 management, direct deposit, time-off tracking, basic HR consulting, employee handbook templates, online HR platform access, harassment training (basic), benefits enrollment portal, COBRA administration, ACA reporting, OSHA logs, and unemployment claim handling.
Health insurance premiums (employer + employee contributions to the master health plan), workers' compensation premium (charged as % of payroll based on classifications), 401(k) plan participant fees, FSA/HSA admin, life and disability insurance premiums, and any specialty add-ons (deeper compliance modules, specialty HR consulting hours, equity admin).
Ask each PEO for a 12-month total cost projection that includes both admin fee AND projected workers' comp AND projected benefits premium for your specific employee mix. Don't compare just admin fees — that's the smallest line item and the most variable. The PEO with the lowest admin fee can easily be the most expensive overall once benefits and workers' comp are factored in.
Setup/implementation fees (typically $50–$200 per employee one-time, sometimes waived), early termination penalties (typically pro-rated months remaining in contract), benefits broker fees (most PEOs don't allow you to keep your existing broker), 401(k) participant fees (read the master plan disclosure carefully), and add-on modules (some PEOs charge separately for advanced HR consulting, learning management, or compliance modules).
PEO pricing is negotiable, especially at 25+ employees. Things that move pricing: multi-year commitment (12 vs 24 vs 36 months), prepayment, headcount growth projection, and competitive quotes from other PEOs. Get quotes from at least 3 PEOs and let them know — they'll often sharpen pricing meaningfully.
Tell us about your business in 2 minutes — we'll match you with the three PEOs that actually fit. Free service.