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What appears below is a breakdown of the cost of employment. This list is not exhaustive and ignores other costs that may face an employer depending on the number of employees and the state in which the employees are located. |
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Mandated Benefits | Social Security
Medicare
Federal Unemployment Insurance
State Unemployment Insurance |
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Mandated benefits are considered part of your payroll costs. Whether you hire a PEO or you process your own payroll, this cost will remain almost the same. A minor deviation may occur if your state unemployment insurance rate is different than that of the PEO.
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Payroll Administration |
Preparing Earning logs
Calculating regular and overtime
Tracking bonuses and holiday pay, severance, and sick leave
I-9 Compliance
W-4 and records
Issuing checks
Making Payroll Deposits
Preparing Quarterly and Annual reports
Maintaining Payroll RecordsBookkeeping
W2 and year end reports |
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In a PEO relationship, almost all items in this list are handled by a PEO. Occasionally, a company representative may have to decide how much to pay employees who do not have set wages. In a PEO relationship, instead of cutting payroll checks, you wire the PEO one amount every pay period. It’s that simple. The PEO then processes and distributes accurate paychecks to your worksite on time, and often offer direct deposit of paychecks. Outsourcing your payroll to a PEO is one of the many benefits of PEO relationship.
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Workers’ Compensation
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Workers Compensation Insurance
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A PEO can generally obtain a more affordable workers compensation policy for you because a PEO is better situated to do so and it has more experience in this area. As the cost of workers comp grows, the savings on the workers comp insurance could outweigh the entire cost of PEO services.
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Consulting |
Cal-Osha Consulting
Workers’ Compensation Claims
Unemployment Claims
Wage Garnishment and Records
Wage Law Compliance
Labor Board Disputes
Terminations
ADA Compliance
Wage and Hour Law Compliance
Discrimination Compliance
Background Checks |
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This is one of the most under-rated area of liability for most companies. Employment errors can be dangerously lethal to a business. With so many employment laws, including COBRA, ADA, INS, EEOC, OSHA and others, even the smallest mistake can be legally significant. In fact, the minutest detail can become a company’s chief detriment.
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Payroll Support | Payroll Software and Computer
Payroll Files and Space
Employee Handbooks
Personnel Forms |
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A PEO is best equipped to handle this area of employment. More importantly, a PEO can make the company appear more professional and hence increase employee retention. |
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Benefits | Cost of search for benefits
Administration of Benefits
Benefits booklet
Cobra Administration
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More and more companies try to increase employee retention by offering better quality benefits that is more affordable to the employees. This is one area when a PEO can truly benefit a company. With thousands of employees, a PEO is able to offer Fortune 500 benefits to a small company, at reduced rates.
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