Somewhere between 100 and 500 employees the PEO question changes shape. Below it, the argument is mostly about access: a 30-person company cannot buy the benefit plans or the HR infrastructure a PEO can hand it on day one. Above it, you have leverage of your own, and the honest question becomes whether the PEO still beats what you could buy yourself. Most proposals are still written for the first company. This page is the test for the second.
Who wrote this. PEO Consulting Partners is an independent PEO brokerage and consulting firm, placing clients since 2015: 100+ clients placed, 36 PEOs compared, and every comparison reconciled plan by plan and tier by tier on the same enrolled population. This page uses no client data.
What actually changes between 100 and 500 employees
Four things change, and they change independently, which is why a proposal that looks good on one can be wrong on the other three.
- Your claims experience starts to count. In the small group market your premium cannot reflect your own claims. Above the small group line it can, which cuts both ways: a group with a bad year gets penalised, and a healthy group finally gets credit. See what changes when you cross 50 employees for the counting rules and the state definitions, which is where this begins.
- The fee basis compounds. A fee quoted as a percentage of payroll grows every time you give a raise or hire a higher-paid employee. The same fee quoted per employee per month moves only when headcount moves. At this size, with wages rising, those two bases diverge year after year.
- Your workers' compensation story becomes your own. As premium grows, your own payroll and loss history carry more weight in your experience modification. Pooled comp pricing inside a PEO is no longer automatically better than what your own record earns you outside one.
- The service model matters more than the platform. At 30 employees a help desk is fine. At 300 employees, across multiple states, somebody has to own your account, your audits and your renewal. Providers differ here more than they differ on technology, and the difference is rarely in the proposal.
The decision rubric, in order
Run these in sequence. Each one is answerable with your own numbers, and the first three decide most cases.
- Price your own renewal first. Get your current carrier's renewal and an open-market quote for your group before you read a single PEO proposal. Without that number you have nothing to compare a master plan against, and the proposal will anchor you instead.
- Separate the three layers of every quote. Pass-through money (wages, payroll taxes, state unemployment) is not new money and never belongs in a savings calculation. The costs that move are medical, ancillary and workers' compensation. The administrative fee is the only purely new money. The method is in how to compare PEO quotes apples to apples, and the fee bases are in what a PEO actually costs.
- Normalise the fee to one basis. Convert every quote to the same basis on your own payroll and your own headcount, then ask what happens to it after a 5 percent payroll increase. Of the 36 PEOs on our panel, 15 describe a pricing model that can be quoted as a percentage of payroll, so this conversion is not an edge case.
- Test the benefits both ways. Ask each provider whether their number puts your group on their master policy or keeps your plan in the open market, then compare like with like. Two quotes that assume different arrangements are not comparable, however similar the totals look.
- Check your comp separately. Compare the PEO's comp pricing against your own policy at your own experience modification, class code by class code. Comp is the line where mid-market companies most often find the PEO is more expensive, and it is usually buried in a bundled rate.
- Ask who owns the account. Named service team or a queue, how many clients per specialist, who handles a multi-state audit, who is in the room at renewal. Get the answer in writing and in the agreement, not in the presentation.
- Read the exit before you read the price. Notice period, renewal mechanics, what happens to your plan and your comp policy when you leave, and what the first renewal increase can be. At this size unwinding is a project, so the exit terms are part of the price. Hidden fees in PEO agreements lists what to ask for line by line.
Which PEOs position for a company this size
The field narrows as you move up the band. A company of 120 employees is inside almost every provider's stated range; a company of 400 is inside far fewer. Below is every PEO on our panel whose own published positioning states a company-size range reaching 500 employees, with its credentials and how it quotes its fee.
| PEO | Stated company size | CPEO / ESAC | How the fee is quoted |
|---|---|---|---|
| ADP TotalSource | 50 to 500 employees | Yes / Yes | Percentage of payroll or PEPM, quoted per client |
| AlphaStaff | 25 to 500 employees | No / Yes | Quote-only PEPM or modular |
| DecisionHR | 1 to 500 or more employees | Yes / No | Quote-only, typically PEPM or percentage of payroll depending on the workers' compensation classes |
| Engage PEO | 25 to 500 employees | Yes / Yes | Quote-only PEPM |
| FrankCrum | 10 to 500 or more employees | No / No | Bundled administrative fee quoted per client, driven by payroll size, headcount and workers' comp risk class |
| INFINITI HR | 1 to 500 employees | Yes / No | PEPM or percentage of wages, quoted per client |
| Insperity | 25 to 500 employees | Yes / Yes | Custom PEPM or percentage of payroll, quoted per client |
| Landrum HR Solutions | 5 to 500 employees | Yes / Yes | Bundled administrative fee quoted per client, driven by headcount, payroll and workers' compensation risk class |
| Paychex PEO | 5 to 500 employees | Yes / Yes | PEPM or percentage of payroll, quoted per client |
| ProService Hawaii | 1 to 500 or more employees | No / Yes | Quote-only, typically PEPM or percentage of payroll |
| Rippling | 10 to 1,000 employees | No / No | Platform fee per user plus a quoted PEO service |
| SouthEast Personnel Leasing, Inc. (SPLI) | 5 to 500 employees | No / No | Percentage of payroll, driven largely by workers' comp class codes, quoted per client |
| Stratus HR | 5 to 500 or more employees | No / No | Per-employee-per-month, quoted per client |
| TriNet | 15 to 500 employees | Yes / Yes | Percentage of payroll or PEPM, customized by company size, industry, footprint and services |
| Vensure Employer Solutions | 10 to 500 employees | Yes / Yes | PEPM or percentage of payroll, quoted per client (varies by legacy brand) |
15 of the 36 PEOs on our panel state a company-size range that reaches 500 employees. 20 position for a company of 100 but state a ceiling below 500, and one states no numeric range at all. Listed alphabetically, not ranked. Every range, credential and fee basis is that PEO’s own published positioning from its directory profile, verified September 2026 against the IRS CPEO list and the ESAC directory. A stated range is positioning, not an acceptance rule: a PEO frequently quotes outside it, which is a question we ask on your behalf rather than a reason to rule anyone in or out.
Two cautions on reading that table. A stated range is positioning, not an acceptance rule, so a provider listed with a lower ceiling will often still quote a larger group, and we ask. And a certification is a floor, not a recommendation: IRS certification and ESAC accreditation tell you about financial assurance and tax liability, not about whether this provider will price your group well.
PEO, ASO, or keep it in house
At this size the alternatives are real, and the right answer is sometimes none of the above. A PEO bundles employment administration, benefits and comp under a co-employment agreement. An administrative services arrangement does the administration without co-employment and leaves your benefits and comp where they are, which suits a company whose own plan is already competitive. A payroll provider plus an independent benefits broker plus your own HR lead is the common mid-market build, and it is the honest comparison for a company that has outgrown the access argument. We lay out the differences in PEO versus ASO, PEO versus HR outsourcing and PEO versus a payroll provider.
One practical note: ask each PEO whether it also quotes an administrative services arrangement. Several do, and seeing both numbers from the same provider on the same group is the cleanest way to price what co-employment is actually buying you.
What a good mid-market process looks like
The companies that get this right do four unglamorous things. They fix the census first, because a headcount or enrollment error moves every quote and nothing else can be compared until it is right. They send every provider the same information on the same day, so the quotes are answers to the same question. They insist on quotes broken out by layer rather than a single bundled rate. And they decide on a written comparison rather than a presentation, because the differences at this size live in the comp detail, the plan design and the agreement, not in the headline.
That is the work we do. We are an independent brokerage, we are paid by the provider that is selected, and the comparison costs the employer nothing. If you want it run on your numbers, request a comparison and we will go to market on your census.
FAQ
Is a PEO worth it for a company with 100 to 500 employees?
It depends on one comparison, and it is not the one most proposals invite. At this size you are usually choosing between a PEO master plan and your own plan priced on your own claims experience, plus the administrative fee on top. A PEO is worth it when the master plan beats what the open market will write for your group, when your workers' compensation costs less inside the PEO than your own experience modification earns you outside it, or when it replaces HR infrastructure you would otherwise have to build. It is not worth it because the admin fee looks small.
At what size do companies outgrow a PEO?
There is no fixed size. What changes is leverage: as your payroll and your own claims record grow, carriers and comp insurers will price you directly, so the pooled rates a PEO can offer stop being automatically better than what you can get alone. Companies usually leave when their own experience would be rated favourably on the open market, when they have built an internal HR and benefits function, or when a percentage-of-payroll fee has grown faster than the service behind it. The test is whether the PEO still wins on price or capability, run at every renewal.
Should a 300 employee company pay a percentage of payroll or a flat fee per employee?
Compare them on your own payroll, not in the abstract. A percentage of payroll rises every time you give a raise or hire a higher-paid employee, while a flat per-employee-per-month fee moves only when headcount moves. At 100 to 500 employees with rising wages, the percentage basis compounds against you, which is why we quote both bases where a provider offers both and ask for the per-employee basis in writing. The administrative fee is also the only layer the provider fully controls and prices itself, so it is the layer to negotiate.
Can we keep our current health plan and still use a PEO?
Sometimes, and it is worth asking explicitly. Some providers will write your group on their own master policy only, some will administer a plan you keep in the open market, and some quote both arrangements side by side. Which one you are being quoted changes the comparison completely: a master-policy quote replaces your plan and its rates, while an open-market arrangement keeps your plan and prices the service around it. Ask every provider which arrangement their number assumes before you compare two proposals.
Is a PEO cheaper than building an internal HR team?
They are different purchases and the honest comparison has three parts, not one. Count the fully loaded cost of the HR and benefits staff you would hire, the cost of the benefits and workers' compensation you could buy on your own at your size, and the administrative fee. An internal team does not get you pooled benefit rates, and a PEO does not remove the need for leadership on hiring, performance and culture. At 100 to 500 employees most companies end up with some of both, which is why the decision is about which layer each one buys.
Do PEOs work with companies over 500 employees?
Many do, and several state no upper limit at all. A stated company-size range is positioning rather than an acceptance rule, so a provider whose published range stops below your headcount will frequently still quote. The practical change above 500 is that you are no longer a standard case: pricing, benefit plan design and service model all get negotiated individually, and the quality of the bench assigned to your account matters more than the published range.