Cheap Employee Leasing – How Affordable is PEO Outsourcing Prices in 2018?

Quality PEO providers can pricing as low as $500 (annually) per employee, and on average a small company may invest as much as $145 per month.

PEO (professional employer organization), sometimes called employee leasing, is a service that companies can use to essentially transfer the official employment responsibilities over their staff to the service provider. It’s good to know the pros and cons of buying employee leasing vs temporary staffing solutions for your business. The first cost of a PEO involves a setup fee where this transfer takes place. For small companies looking for a cheap service, this setup fee can be as affordable as $600 or even less. When larger companies need this type of service, the costs are going to grow, often reaching $5000 or more. After the initial setup fee, the costs are going to be based upon a percentage of what your company is paying the staff that are covered under the agreement with the PEO. This fee could range from 1% to 15% of the total dollar value of your payroll.

In addition to the size of your firm, the actual services that you request from the PEO will affect how much of a bargain you can strike on the percentage they charge based on your payroll. Services that these companies offer include:

  • Payroll processing
  • Benefits packages & HR Management
  • Risk Management
  • Hiring
  • Training and development
  • Safety administration


The more elements of your business that you need addressed by the PEO, the hgher you can expect your bill to be.

The length of the contract that you negotiate with an employee leasing firm may also affect your rates. If you’re willing to commit to using their services for a longer period of time, some PEO companies may be willing to assess a smaller percentage of your payroll as your monthly fees.

What is PEO – Employee Leasing?

What is Employee LeasingA professional employer organization is a company that specializes in all of the paperwork and administrative details that are required of an employer. Essentially, these companies are professional employers – they specialize in handling employees, much like a human resources department would in a company that was large enough to have a stand along department for HR.

The tasks that these organizations handle include all of the specific items detailed above, but most importantly the PEO becomes the legal employer of the staff for any tax purposes. Then, the company engaging the PEO essentially leases the employees back to themselves so that they can work at the jobs they were originally engaged for. This is an ideal solution for many small businesses that might not have the resources or the experience in areas such as insurance and taxation in order to properly manage their staff.

One of the main reasons that companies opt to use PEOs is because of the discounts that it can bring in regards to benefits packages. Most group benefits providers have volume discounts that allow larger organizations to ensure coverage and benefits for their employees at a bargain in exchange for their business. By using a PEO, even smaller companies can take advantage of the leverage a large organization provides when pricing out benefits packages. They also have working relationships with many different benefits providers allowing them to suss out the best rates based on the package you want offered to your team.

What to Look for in Low-Cost PEO – Employee Leasing?

What To Look for in Cheap PEO LeasingThe first thing that you should always look for when considering hiring a PEO is an actual savings over handling the benefits and payroll for your company internally. A good PEO should be willing to offer you a consultation where they can show their model will help you bring the same benefits to your staff but at a more economical rate than what you are currently paying. The two most common considerations for PEO outsourcing include:

  • HR Service Solutions (HR management, benefits management, risk management payroll)
  • Access (online access, mobile apps, licencing in one or more states)

Second, a PEO company should be able to provide you with references so you can speak to some of their current clients directly. The cost benefits associated with using a PEO are gained because they pool employees from several companies in order to give them more leverage with insurance companies and benefits providers. Therefore, a high quality company should have no shortage of clients willing to provide a reference for their work.

Compliance is another very important issue when dealing with employee leasing firms. It doesn’t matter if a company’s services are low-priced if they’re going to end up with you in hot water with any tax or regulatory body. Don’t be afraid to ask questions to find out exactly how these companies ensure that they are staying in compliance at all times. The best companies should have no problem answering this type of question, because they will make compliance a top internal priority.

Bargain PEO – Employee Leasing Companies with Discounted Prices

Find The Lowest Cost Employee Leasing ServiceThe exact amount that you end up paying for the services of a PEO is going to mostly be determined by the individual agreement and discounted rate that you can work out with the company based on the size and structure of your organization. However, these companies have a reputation for providing excellent service at reasonable prices.

Paychex: Paychex has over a half million clients. The size of the client base alone speaks volumes about the quality of the service the company provides. The company offers a wide range of HR and payroll services, including affordable PEO services. Some of the benefits of working with this company include the assignment of a dedicated advisor who will cover your account, and a very detailed breakdown of any of the charges that are billed to your company.

Oasis Outsourcing: Oasis is a flexible and inexpensive company that takes advantage of the latest technology to make doing business with them as easy as possible. First, when you use their services you are not required to sign any sort of a long-term contract. If you’re ever unhappy with their services, you can cancel immediately. The company also has a web portal and an app so that you and your employees always have easy access to any important payroll and benefits applications.

Don’t be afraid to negotiate with these companies in order to secure the best rates possible for your organization. Often they have broad categories where pricing is based on the size of the organization, such as one set of rates for organizations with 5-50 employees and another for those with 50-100 employees. If you have 45 team members, don’t just assume that you have to pay the higher rates without having a conversation with a representative from the company first.

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