How Much Does a PEO Cost in 2026? Fees, Models and Real Ranges

A PEO charges you in two parts, and most of the confusion in PEO pricing comes from mixing them together. The first is the administrative fee, the PEO's own charge for running payroll, HR, benefits, compliance and risk. It is billed either as a flat per-employee-per-month amount, written PEPM, or as a percentage of gross payroll, usually around 2 to 4%. The second part is everything the PEO collects and hands to somebody else: medical and ancillary premiums, workers compensation premium, state unemployment tax, and the employer share of FICA. Those pass-throughs are usually the larger number.

So the honest answer is two numbers, not one. On the administrative fee, the publicly published or publicly reported ranges across the providers we work with run from about $59 to $300 plus per employee per month, and most PEOs publish nothing at all. On the total invoice, it depends on your headcount, average wage, states, class codes and claims history, and how many employees take the medical plan. Below we break down each line, show the arithmetic on both models, and give you the numbers we can stand behind. We do not publish industry averages or typical savings claims, because nobody can substantiate them for your company.

What a PEO actually charges you for

Treat a PEO invoice as one negotiable line sitting on top of several that are out of the provider's hands. The administrative fee pays for payroll processing and tax filing under the PEO's employer identification number, W-2 production, benefits administration, HR advisory support, compliance guidance, workers comp administration and claims handling, safety and risk services, and the technology platform. When someone says a PEO is cheaper, that is the line they mean.

The pass-throughs behave differently. Medical premiums are set by the carrier and the plan design. Workers comp is driven by your class codes, the payroll in each code, and your loss history. State unemployment is set by the state, and FICA is fixed by statute. No PEO can make a high-hazard class code cheap. What it can do is put you in a larger pool and manage claims well.

Line item	Who sets it	What moves it	How to compare it
Administrative fee	The PEO	Headcount, average wage, service level, contract term, negotiation	Convert to one per-employee-per-month dollar figure, then compare like for like
Medical and ancillary premiums	The carrier, through the PEO's plans	Plan design, participation rate, age and family mix, employer contribution	Price the same plan tier and the same employer contribution in both quotes
Workers compensation premium	The carrier and your class codes	Class codes, payroll by code, loss history, experience modification, state	Confirm identical class codes and payroll splits before comparing rates
Statutory taxes (SUTA, FICA)	The states and federal law	State rates, wage bases, the employing entity's experience rating	Largely not negotiable; check whether the PEO's state rate helps or hurts

This is why the cheapest administrative fee is often not the cheapest total: a provider can quote an attractive fee and lose it back on a medical renewal. It is also why a bundled quote is close to useless. If you cannot see the admin fee on its own, you cannot tell whether you are paying for service or insurance.

PEPM vs percentage of payroll

The two models produce very different bills for the same company, and the deciding variable is your average wage. A flat PEPM fee is indifferent to what you pay people. A percentage of payroll is not: it rises every time you give a raise, even though the payroll and HR work has not changed.

Here is the arithmetic on a hypothetical company. The fee levels below are illustrative, chosen to show how the models behave, not market rates and not a quote. Take a 40-person company with $70,000 average wages, so $2,800,000 in annual payroll. At an illustrative flat fee of $150 per employee per month, the administrative cost is 40 times $150 times 12, or $72,000 a year. At an illustrative 3% of payroll it is $84,000, so the flat fee wins by $12,000.

Now change one variable. Raise average wages to $95,000, so $3,800,000 in payroll. The flat fee is still $72,000. The percentage is now $114,000: same headcount, same work, a $42,000 gap. Run it the other way, dropping average wages to $45,000 and payroll to $1,800,000. The flat fee is still $72,000 and 3% is $54,000, so the percentage is cheaper by $18,000.

Higher-wage companies usually prefer PEPM, because the fee stops chasing payroll. Lower-wage, higher-headcount companies sometimes do better on a percentage. If you are offered a percentage, ask for a cap or for the PEPM equivalent, and ask what the percentage applies to: gross wages only, or gross wages plus bonuses, commissions and overtime. That definition can move the number more than the rate does.

Published and reported PEO price ranges

The table shows the pricing model, typical published cost and contract flexibility for eight better-known providers on our panel, taken from their own published or publicly reported pricing. Read them as ranges, not quotes.

Provider	Pricing model	Typical published cost	Contract flexibility
Justworks	Flat PEPM (published)	$59 to $109 per employee per month (published tiers)	Month-to-month available. Annual discount offered.
CoAdvantage	PEPM	$120 to $180 per employee per month	Annual contracts. Competitive exit terms.
G&A Partners	PEPM	$130 to $200 per employee per month	Annual contracts. Reasonable exit terms.
Paychex PEO	PEPM or percentage of payroll	$140 to $220 per employee per month	Annual contracts standard.
ADP TotalSource	Percentage of payroll (typically 2 to 4%) or PEPM	$150 to $250 per employee per month	Annual contracts standard. Early termination fees apply.
TriNet	Percentage of payroll or PEPM	$150 to $250 per employee per month	Annual contracts standard.
Insperity	Custom PEPM or percentage of payroll	$230 to $300 plus per employee per month	Annual contracts standard. Negotiate exit clauses carefully.
Rippling	Modular: Unity platform fee (around $8 per employee) plus PEO add-on	$8 to $35 per employee per module; PEO add-on quote-only	Annual contracts standard. Implementation fees common.

Justworks is the only PEO on our panel publishing flat tiers you can read before you talk to anyone, at $59 to $109 per employee per month (published tiers). ADP TotalSource's pricing model is given in its profile as percentage of payroll (typically 2 to 4%) or PEPM, one of the few percentage bands attributed to a named national provider. Rippling prices per module and its PEO add-on is quote-only, so those module rates do not tell you the PEO cost.

The bigger point is how unusual published pricing is. Of the 36 PEOs on our panel, 26 publish no price at all: their profiles record the cost as quoted per client or quote-only, among them AlphaStaff, Engage PEO, ExtensisHR, PrestigePEO, Questco, Resourcing Edge, Sequoia One, FrankCrum, Nextep, BBSI, GMS and Stratus HR. Deel PEO publishes only a starting rate, $125 per US PEO employee per month. So roughly three quarters of the market will not quote without a census. That is not evasion, since class codes and medical participation genuinely change the answer, but it does mean the only way to learn what you would pay is to put one census in front of several providers at once.

What changes the price for your company

Headcount. Per-employee fees usually step down as you grow, and most PEOs price in bands. Crossing a boundary can move your effective rate more than negotiation does, so ask where the next break sits.

Average wages. Decisive on a percentage of payroll, irrelevant on flat PEPM. It also affects pass-throughs, because state unemployment wage bases are capped and higher wages hit those caps earlier.

State mix. Every state you employ someone in is another registration, another set of filings, another unemployment rate and often another set of leave rules. Multi-state employers cost more to service.

Industry and workers comp class codes. The biggest swing factor for anyone outside an office. A roofing or trucking code prices nothing like a professional services code, and some PEOs will not underwrite higher-hazard work.

Benefits participation. How many employees enrol, and at which tier, drives the largest pass-through. Ask what participation the quote assumes.

Claims history. Your loss runs and experience modification follow you. A clean history is worth real money in underwriting; a bad one narrows the field willing to write you.

Contract term. A longer commitment can buy a lower fee and lock you into a renewal you do not like. Justworks offers month-to-month with an annual discount; most of the panel runs annual agreements, several with early termination fees.

Is a PEO worth it at your size?

Under 10 employees. The case is access, not savings: you cannot buy a competitive group medical plan on your own, and nobody owns compliance. Several panel PEOs write this small. XcelHR states 1 to 100 employees with a sweet spot of 5 to 50, INFINITI HR 1 to 500, DecisionHR 1 to 500 plus, and ProService Hawaii markets a 1 to 25 tier. Expect a rate near the top of any band.

10 to 49 employees. The densest part of the market and where you have the most choice. Justworks and Abel HR state a sweet spot of 10 to 75, Amplify PEO 15 to 75, Emplicity and Nextep 20 to 100, Helpside 25 to 100, GMS 10 to 100 and The Employer Group 10 to 50. The decision usually comes down to whether you want the lowest-cost flat-fee platform or a named HR contact who knows your business.

50 to 250 employees. You are in the sweet spot of the national providers and you have leverage. Insperity states 25 to 500 with a sweet spot of 50 to 200, ADP TotalSource 50 to 500 with a sweet spot of 75 to 200, TriNet 15 to 500 with a sweet spot of 50 to 250, G&A Partners 5 to 250, CoAdvantage 10 to 250, and Rippling 10 to 1,000 with a sweet spot of 25 to 300. Going direct to the insurance market is credible at this size, so make the PEO compete against it and get a renewal cap in writing.

How to compare two PEO quotes properly

1. Send both providers the identical census. Same headcount, wages, titles, states and class codes. A quote on a different census is not a comparison.
2. Isolate the administrative fee. Ask for it as a standalone per-employee-per-month figure. If it is quoted as a percentage, convert it: annual payroll times the percentage, divided by headcount, then by 12.
3. Price medical on identical plan designs. Same tier, deductible, employer contribution and assumed participation. Otherwise you are comparing a rich plan against a thin one.
4. Check workers comp on identical class codes. Confirm the codes each provider used and the payroll in each. A quote that reclassifies half your workforce into a cheaper code is an audit waiting to happen.
5. Add the one-time costs. Implementation, setup, state registration and integration fees. Spread them over the first year into the monthly figure.
6. Get the renewal language in writing. How renewals are calculated, whether there is a cap, and what notice precedes a rate change.
7. Read the exit terms before the pricing. Notice period, termination fees, what happens to your plan year and 401(k) mid-term, and how fast you get your data back.
8. Compare totals, not fees. Add admin fee, medical, workers comp and unemployment into one annual all-in number. The winner on the fee line is frequently not the winner on that number.

That is most of what we do. We run the census once, put it in front of the panel PEOs that write companies like yours, and hand back the comparison. We are paid by the PEO you choose, so the side-by-side costs nothing. Our guides to switching PEOs and the best PEOs cover the rest.

FAQ

How much does a PEO cost per employee?

Administrative fees in the publicly published or publicly reported ranges we track run roughly $59 to $300 plus per employee per month: Justworks at $59 to $109 on published tiers, CoAdvantage $120 to $180, G&A Partners $130 to $200, Paychex PEO $140 to $220, ADP TotalSource and TriNet $150 to $250, Insperity $230 to $300 plus. Those are ranges, not quotes, and most PEOs publish no number at all.

What is a PEO administrative fee?

It is the PEO's own charge for its services: payroll and tax filing, HR support, benefits administration, compliance, risk and safety work, and the technology platform. It is the only invoice line the provider fully controls and the only one that is genuinely negotiable. Everything else is a pass-through: medical premiums, workers comp, state unemployment tax and the employer share of FICA, and together those are usually the larger part of the bill.

PEPM or percentage of payroll: which is cheaper?

It depends on your average wage. A flat PEPM fee costs the same whether an employee earns $45,000 or $150,000, so it gets relatively cheaper as wages rise. A percentage of payroll climbs with every raise even though the administrative work has not changed. Higher-wage companies usually do better on PEPM; lower-wage, higher-headcount companies sometimes do better on a percentage. Convert both quotes to an annual dollar figure on your own census before deciding.

What is included in the PEO fee?

The fee normally covers payroll processing, tax filing and remittance under the PEO's employer identification number, W-2 production, benefits administration and enrollment, HR advisory support, policy work, compliance guidance, workers comp administration and claims management, safety and risk services, and the technology platform. What it does not cover, and what appears as separate pass-through lines, is the cost of the benefits themselves, the workers comp premium and unemployment tax.

Is a PEO worth it for a 10-person company?

Often yes, but the reason is benefits access rather than savings. At ten employees you usually cannot buy a competitive group medical plan on your own and nobody on staff owns compliance. Plenty of PEOs write at that size: Justworks targets 5 to 150 employees with a sweet spot of 10 to 75, XcelHR 1 to 100, Abel HR 5 to 150, and The Employer Group roughly 5 to 100. The test is whether the all-in cost beats what you can assemble yourself.

Is a PEO worth it for a 100-person company?

At 100 employees you have leverage. You sit inside the sweet spot of the larger providers: Insperity targets 25 to 500 with a sweet spot of 50 to 200, ADP TotalSource 50 to 500 with a sweet spot of 75 to 200, TriNet 15 to 500 with a sweet spot of 50 to 250, and G&A Partners 5 to 250. You are also large enough to go direct to the insurance market, so make the PEO compete on total cost and negotiate renewal caps.

How long does it take to switch to a new PEO?

Plan on four to eight weeks from a signed service agreement to the first PEO-processed paycheck. That covers census and payroll history, state registrations, workers comp underwriting, benefits setup and open enrollment, and parallel payroll testing. Switching at a quarter or plan-year boundary is cleaner: a mid-year move can split W-2s between two employers of record and can create a short 401(k) blackout during the plan transfer.

What hidden costs should I watch for in a PEO agreement?

The ones that most often get missed are one-time implementation or setup fees, payroll-related charges (off-cycle runs, manual checks, amended filings, custom reports), minimum monthly fees, termination fees and early-exit penalties, year-end processing fees, HR project fees, state registration fees, and benefits administration charges. Renewal increases are the biggest one: attractive first-year pricing can climb at renewal, so ask in writing how renewals are handled. The defense is simple: request a full fee schedule and a sample invoice before signing, and ask the provider to identify every charge that could apply to your company.

The practical takeaway

Stop shopping for the lowest administrative fee. It is the most visible number on a PEO quote and the least reliable predictor of what you will spend, because the pass-throughs underneath it are larger and move independently. Get every quote broken into an isolated per-employee-per-month admin fee plus itemised pass-throughs on the same census, plan design and class codes, compare annual all-in totals, and read the renewal and exit language before the price. If you would rather not run that across a dozen providers, send us your details and we will put the side-by-side together for free.